Banking is an important part of the Bahamian economy because it generates a source of income for The Bahamas. In fact, banking which is a TERTIARY industry is the second largest industry in The Bahamas. The first bank in The Bahamas was the Government Savings Bank established in 1836. It was also known as the Public Bank of The Bahamas but closed in 1886. In the same year of its collapse, a Government Savings Bank was established under the control of the Post Office Department. The Bank of Nassau was then opened in 1889 and for nearly thirty years played an important role in the commercial life of The Bahamas. However, due to mismanagement, it failed in 1916.
In 1908, the first foreign company, THE ROYAL BANK OF CANADA, was opened for business. It provided The Bahamas with first rate banking services and for nearly thirty years was the only commercial bank in The Bahamas. Barclays Bank was then opened in 1947. It merged with the Canadian Imperial Bank of Commerce (CIBC) and is now known as First Caribbean. After 1947, many other banks and trust companies were opened in The Bahamas. The first American Bank, FIRST NATIONAL CITY BANK began operating in 1960. In 1974, the CENTRAL BANK OF THE BAHAMAS was officially opened by Queen Elizabeth II. The duties of Central Bank of The Bahamas involves overseeing, regulating and advising the banking and financial institutions of The Bahamas. The People’s Penny Savings Bank, the only Bahamian owned bank, was founded in 1952.
Today many companies carry on what is known as “offshore” banking, that is the buying and selling of foreign currencies, particularly the EURO-DOLLAR. Therefore, an offshore bank is a bank which operates outside of their country. Most offshore banks in The Bahamas have their headquarters in many far away places. Foreigners deposit their money to avoid paying taxes in their own countries. It is then clear that companies that own offshore banks prefer that their banks are located in places like The Bahamas because we do not have income tax or other related taxes. Many of the offshore banks in The Bahamas are either Swiss or American.
THE BAHAMAS DEVELOPMENT BANK
The Bahamas Development Bank was founded in January 1978 by the government of the Commonwealth of The Bahamas in order to provide long term financing for the development of enterprises, co-operatives and small business thus, ensuring economic growth in The Bahamas. The bank created new employment opportunities, helped to utilize local materials and resources as well as reduce imports, introduce new technology and skills while placing money in new hands. It has also through a range of projects, encouraged growth on the family islands. STOP HERE
Answer the question from the notes above.
1. Why is banking considered a tertiary industry?______________________ _______________________________________________________________________ _______________________________________________________________________ 2. Tourism is our number one industry. Why do you think banking is the second largest industry?________________________________________________ ________________________________________________________________________________________________________________________________________________________________________________________________________________________ 3. Write the dates when each of the following banks were established. a. Government Savings Bank_____________
b. Royal Bank of Canada____________
c. The Bank of Nassau_____________
d. Barclays Bank_________
c. First National Bank___________
f. Central Bank of The Bahamas__________
g. The People’s Penny Saving Bank____________
4. Which bank was known as the only owned Bahamian bank?
________________________________________________________________________________________________________________________________________________ 5. Which was the first established bank in The Bahamas?...