BANKING SYSTEM OF NEVIS

Domestic banking is regulated by the Banking Act 1991 and non-domestic banking falls under the Financial Services (Regulations) Order 1997. Nevis has its own Offshore Banking Ordinance 1996.
Two types of banking licenses are granted under the Federation's 1997 Financial Services (Regulations) Order. 'Unrestricted' licenses require minimum financial resources of 1,350,000 East Caribbean dollars ($500,000), while for 'restricted' licenses the level is only 135,000 East Caribbean dollars ($50,000).
The Confidential Relationship Act, 1985 for St. Kitts-Nevis offers complete confidentiality should foreign authorities seek private banking and financial records. Prison terms are mandatory for violation of the statute.
The banking system consists of the Government owned St Kitts-Nevis-Anguilla National Bank Ltd, the Development Bank of St Kitts and Nevis, the privately-owned and semi-privately-owned: Bank of Nova Scotia, Bank of Nevis, First Caribbean, Royal Bank of Canada Royal Bank of Trinidad and Tobago, St. Kitts-Nevis Finance Co. Ltd (FINCO), the Nevis Cooperative Bank, the St. Kitts Credit Union, Nevis Credit Union and the Police Credit Union.

The Nevis Offshore Banking Ordinance 1996 defines offshore banking as follows:
- Receiving of foreign funds through the acceptance of foreign money, deposits payable upon receipt demand or after a fixed period or after notice;
- The sale or placement of foreign bonds certificates, notes or other debt obligations or other securities, or
- Any other similar activities involving foreign money or foreign securities, and
- Either in whole or in part using foreign funds so acquired for loans, advances and investments whether in Nevis or elsewhere.
Licenses under the Banking Ordinance are issued to eligible companies or qualified foreign banks. An eligible company must be a wholly owned subsidiary of a local bank regulated by the Eastern Caribbean Central Bank that is licensed under the Banking Act to do business in Nevis. A qualified foreign bank is a foreign bank that is licensed under the Banking Act, or is foreign bank with minimum capitalization and assets, as prescribed by the Minister, that is not licensed under the Banking Act but is licensed to do domestic banking in its jurisdiction of incorporation.
An eligible company must be incorporated under the Companies Act as a company limited by shares, and must have objects or business activity restricted to offshore banking from within Nevis. It must have at least one director who is a citizen of St. Kitts and Nevis with a residence in Nevis. The minimum Authorized Capital must be at least EC$2 Million, of which not less than EC$ 1 Million has been Subscribed and Paid Up in cash, such cash being deposited in an account maintained by the Permanent Secretary at the Eastern Caribbean Central Bank.
Not later than four months after the close of its financial year, a licensee must forward to the Permanent Secretary copies of its balance sheet and profit and loss account and the full and correct names of the directors of the licensee. The balance sheet and the profit and loss account must bear on its face the certificate of an auditor.
In 2000, St Kitts and Nevis found itself on the OECD and FATF blacklists, but was removed from both after promising to tidy up legislative problems, which was done with a number on enactments in 2001-2003. After St Kitts was listed as a tax haven, which was uncooperative in fighting money laundering, the government passed the Money Laundering (Prevention) Bill, the Financial Services Intelligence Unit Bill and the Financial Services Commission Bill. The latter Bill established the Financial Services Commission as the main regulatory body for the offshore sector. In June 2002, St Kitts and Nevis was removed from the blacklist drawn up by the Organization for Economic Co-operation and Development (OECD).

Eastern Caribbean Central Bank
The Eastern Caribbean Central Bank (ECCB) was established in October 1983. It is the Monetary Authority for a group of eight island economies namely - Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines. The mission of ECCB is to maintain the stability of the EC dollar and the integrity of the banking system in order to facilitate the balanced growth and development of member states. The monetary arrangements are characterized by :
- the issuance of a single common currency, the flow of which is unrestricted among its members.
- a common pool of foreign exchange reserves; and
- the existence of a Central Monetary Authority which decides on the Union's monetary policy.
The purposes of the Bank are:
- to regulate the availability of money and credit;
- to promote and maintain monetary stability;
- to promote credit and exchange conditions and a sound financial structure conducive to the balanced growth and development of the economies of the territories of the Participating Governments;
- to actively promote through means consistent with its other objectives the economic development of the territories of the Participating Governments.
The governing bodies of the Eastern Caribbean Central Bank are the Monetary Council and the Board of Directors. The Monetary Council is the highest decision making authority. It is comprised of one Minister appointed by each Government of the participating countries. The function of the Council is to provide directives and guidelines on matters of monetary and credit policy to the Bank. The Board of Directors is comprised of ten Directors - the Governor and Deputy Governor, and one Director appointed by each Government of the eight participating countries. The Board of Directors is responsible for policy and general administration of the Bank, while the Governor, the Chief Executive, is responsible for the day-to-day management and operations.

Financial Institutions Operating

St Kitts-Nevis-Anguilla National Bank
Development Bank of St Kitts and Nevis
Bank of Nova Scotia
Bank of Nevis
First Caribbean
Royal Bank of Canada Royal Bank of Trinidad and Tobago
St. Kitts-Nevis Finance Co. Ltd (FINCO)
Nevis Cooperative Bank
St. Kitts Credit Union
Nevis Credit Union
Police Credit Union.