The risks of banking in Barbados range from how the country’s perceived reputation can impact transactions to how choosing the wrong bank can make managing your accounts extremely difficult.
In this article, we’re going to help you navigate these risks and share several important factors you should consider before opening accounts in the Caribbean, specifically in Barbados.
We will also be answering common questions that we receive from our members when considering opening accounts in this Caribbean banking hub.
This article is part of our free series on how to open a bank account in Barbados, which you can access by clicking here right now.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Risks of Banking in Barbados
- Is Barbados Safe for Banking?
- Frequently Asked Questions
- Ready to Open an Offshore Bank Account?
Risks of Banking in Barbados
There are two main risks to consider before banking in Barbados, including negative perceptions about the country’s reputation due to the inclusion by FATF on their greylist and bank-specific risks that can impact account opening and operation.
Is Barbados Safe for Banking?
Yes, Barbados is safe for banking if you choose the right banks, and bankers, and maintain reasonable deposits that match your risk tolerance. That said, like banking in any country, if you choose a bank that has poor management practices, irresponsible lending, and investing, and does not maintain adequate capital and liquidity ratios, it would not be considered “safe”.
However, when the right bank is chosen, there are many special financial deals and benefits to banking in Barbados, which you can learn more about by clicking here and accessing our free guide.
As mentioned, there are two broad risk factors that you should consider before opening accounts with banks in Barbados, which are financial reputation and bank-specific risks. These two factors are explained in detail below.
Financial Reputation of Barbados
While Barbados has made progress in improving the standing of its financial sector internationally over the years, it still holds concerns in regard to money laundering and drug trafficking. In fact, the US Department of State views Barbados as a country of primary concern. And, the Financial Action Task Force (FATF) continues to have Barbados under increased monitoring.
Unfortunately, when a country gets added to a greylist or blacklist, it can impact account holders, outgoing and incoming transactions, specifically how you send money to Barbados, access to and the ability to transact in foreign currency, and even correspondent banking relationships.
Fortunately, Barbados was recently removed from the EU Blacklist. However, as mentioned, it is still on the FATF greylist, which means Barbados banking sector, local regulators, registered banking groups with local operations, and a list of banks in Barbados, are all being closely monitored.
So, before you consider opening personal accounts, private accounts, accounts for commercial funds, or business bank accounts in Barbados, it’s important to determine whether or not banking in Barbados is the right fit for you.
Bank-Specific Risks in Barbados
Not all the leading global banking institutions, including the largest banks in Barbados, are created equal. This is a given. Certain banks are better managed, better capitalized, and worth considering over others. Likewise, certain banks in Barbados only offer specific financial accounts and Barbados banking services to foreign non-residents.
For example, many of the banks here that cater to non-residents only offer wealth management services, exclusive savings accounts, and Barbados private banking services. So, if you are not looking for these services, you will likely want to consider opening accounts elsewhere.
Importantly, another factor to consider beyond risk is the financial charges and the cost of banking in Barbados. Each bank has its own fee structure for foreign clients, including account opening, maintenance, and operating fees. While not all banks charge all of these fees, many do and you should compare directly before deciding which bank to open with.
So, while Barbados is a relatively safe banking jurisdiction, the banks here may not be a suitable option for everyone. This is especially true since the banking sector is walking on eggshells to ensure it’s not added back to the EU blacklist.
That said, if you pass the initial account opening process and meet the Barbados banking requirements, opening a bank account in Barbados may still be worth it.
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Frequently Asked Questions
Below are a few of the most common questions we receive from people asking about the risks of banking in Barbados. If you have further questions you would like answered, don’t hesitate to get in touch.
What Are the Top 3 Bank Risks?
The top 3 bank risks can vary depending on whether you’re opening an individual deposit account, Barbados personal bank account, private bank account, or business bank account. However, generally speaking, the bank risks most non-residents consider before applying to open international accounts with Barbados offshore banking include economic and political risks, bank-specific financial risks, and credit risks.
What Are the Risks in International Banking?
The risks of international banking may include economic and political risks, bank-specific risks, operational risks, credit risks, interest rate risks, financial risks, and more. However, these exact risks are also present when banking domestically in your home country. So, regardless of whether or not you are looking to bank at home or abroad, you should always consider these risk factors to ensure you’re choosing suitable banking institutions and the best banks in Barbados or elsewhere for your client profile.
How Are Banks Regulated in Barbados?
Banks are regulated in Barbados by the Central Bank of Barbados (CBB). The CBB was established in 1972. It is responsible for administering monetary policies, supervision of commercial banks, regulating foreign exchange controls, the currency of Barbados, and more. Importantly, Barbados’ regulatory framework for the banking sector complies with international best practices and standards.
Ready to Open an Offshore Bank Account?
If so, you can access GlobalBanks Insider and start the process of applying for an offshore account in a few clicks.
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And “yes!” GlobalBanks Insider is designed to help foreign and non-resident individuals and companies open bank accounts.
Use this link to see how GlobalBanks Insider can help you successfully open accounts.
