The Central Bank of Bahamas published its supervisory response and guidance for the supervised financial institutions in the context of COVID-19 outbreak. Among other areas, the guidance covered certain temporary relaxations to supervised financial institutions in the areas of reporting requirements, dividend payouts, business continuity, and acceptance of electronic KYC documents. This guidance is a collation of certain COVID-related announcements by the central bank so far. The operations of supervised financial institutions have been drastically modified since March, to comply with the Emergency Powers (COVID-19) Order, 2020 and regulations issued under the Order.
The guidance addresses the following key issues of relevance for financial institutions supervised by the Central Bank of Bahamas:
- Filing of statutory and other returns. The guidance specifies that supervised financial institutions that may face challenges in submitting statutory and other returns to the Central Bank by the specified deadlines, for a period covering up to April 30, 2020, should notify the central bank at least 24 hours before the due date. For such filings as well as others that may fall due based on the reporting timelines, the central bank will consider a first-time request for a reasonable extension without penalty. Also, starting from March 2020, until further notice, all commercial banks must submit monthly reporting on the credit facilities receiving minimum three months of debt service payment deferral, along with the corresponding credit quality measures, using the provided Excel reporting template. Supervised financial institutions are required to upload the completed Excel reports, along with the three attestation forms accompanying the monthly credit quality report, via the ORIMS portal.
- Emergency loan reporting. Given the economic uncertainties surrounding the COVID-19 pandemic, the central bank is requesting, from commercial banks, certain information, including data on total loans and non-performing loans, on a monthly basis, starting from March 2020 until further notice. This information will enable the central bank to monitor the impact of the three-month payment deferral on the loan portfolio and credit quality of commercial banks. The data should be submitted in spreadsheet format or other format on or about the 15th day of the succeeding month.
- Suspension of extraordinary and regular dividend approvals. In light of the pandemic and its expected negative impact on the Bahamian economy, the central bank suspended, with immediate effect from March 2020, all exchange control approvals for domestic bank dividends. This position will be periodically reviewed to determine a medium term position by September 2020.
- Invoking contingency arrangements for business continuity. The guidance states that supervised financial institutions may invoke appropriate aspects of their Business Continuity Plans to address the specific operational needs. Other temporary, contingent outsourcing arrangements may be adopted by the supervised financial institutions once the appropriate controls or risk management safeguards and board-level approvals are in place. The institutions should notify the central bank, when such instances arise.
Keywords: Americas, Bahamas, Banking, COVID-19, Operational Risk, Business Continuity, Credit Risk, Dividend Distribution, Reporting, Central Bank of Bahamas
Previous ArticleNBB Issues Reporting and Accounting Guidance to Ease COVID-19 Impact
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).
EBA published a statement on resolution planning in light of the COVID-19 pandemic.
BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework
ECB published a guideline (2020/97), in the Official Journal of European Union, on the definition of materiality threshold for credit obligations past due for less significant institutions.
FED temporarily revised the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes in response to the COVID-19 pandemic.