Suspicious financial transactions are on the rise in The Bahamas with banks reporting a fourfold increase in fraud attempts in 2020.

Banks reported filings of just over 500 suspicious transactions last year, twice the amount reported in 2019. However, there was a 64 per cent decrease in actual fraud occurrences.

In its recently released summary of its analysis of the Anti-Money Laundering Data Returns submitted by banks and trust companies, co-operative credit unions and money transmission businesses. The Central Bank of The Bahamas plans to review industry practice to ensure that these actual and attempted fraud occurrences, which are typically for small sums, are reported as suspicious transactions.

The Central Bank of The Bahamas reported that as of December 31, 2020, domestic banks reported having approximately 495,000 customers and 580,000 accounts, which represents a contraction of nine per cent and an expansion of two per cent respectively when compared to 2019.

The balances associated with these customers of December 2020 were: deposits of $8.9 billion, loans of $6.2 billion and off-balance sheet/fiduciary assets of $447 million. A total of 2,365 accounts reportedly became dormant in 2020, which represented a 43 per cent decrease when compared to 2019.

Jump in inactive accounts

There was a 10 per cent increase in the number of inactive accounts over the same period. One bank reported a disproportionate share of inactive and dormant accounts.

The Central Bank of The Bahamas is working with this bank to better understand their position noting that all of the domestic banks reported zero positive sanctions hits for both 2019 and 2020. The Central Bank says it is only aware of one Bahamian citizen and one Bahamian company on two of the recognized international sanctions lists.

According to the Central Bank, credit unions reported 17,299 inactive accounts, amounting to $15 million and 5,616 dormant accounts of $1.9 million in 2020. The number of inactive and dormant accounts increased by 73 per cent and 78 per cent respectively.

Of note is the fact that approximately 22 per cent of accounts were categorised as inactive. These large increases are likely due to more attention by the credit union sector to accurate reporting, rather than an increase in actual dormant or inactive accounts.

The regulator pointed out that although credit unions are not subject to the Central Bank’s dormant accounts regime, they are required to declare dormant any account where there has been no activity for five years.

The balance remaining at the time is to be remitted to the Bahamas Co-operative League towards the statutory reserve funds of the credit union. After a period of five years, the funds should be forwarded to the Central Bank of The Bahamas.