The Banking System of Panama, and the Currency of Panama
Panama has no central bank, but the National Bank of Panama serves some of the functions of a central bank, like acting as a clearinghouse for the entire banking system, and holding a portion of the deposit reserves. Panama’s banking sector opened to foreign banks back in 1970, and there is a very high priority on banker-depositor confidentiality.

Panama’s Banking Legislation Has Three Classes of Banks:

1. General banks with a license to operate full-service banks
2. International license banks (offshore banks) who can only accept deposits from international persons or entities.
3. State owned banks, there are two state owned banks in Panama, National Bank of Panama and Caja de Ahorros. Reference
Domestic, foreign and state-owned banks in Panama, all compete on equal terms and all banks are organized into the Panamanian Banking Association and are regulated and licensed by the Superintendencia de Bancos (Banking Supervisory Authority).

Panama’s Currency

Panamas currency is the Balboa, named after the Spanish explorer Vasco Núñez de Balboa, who discovered the Pacific Ocean in 1513. The Balboa has been pegged to the US dollar since 1904, so 1 Balboa = 1 USD. Panama mints its own coins, and they are used side by side with US coins, the paper money in Panama are US treasury bills.

Instead of the $ sign so many people in North America are used to when shopping, you will see B/. in front of the price.

The Balboa replaced the Colombian Peso in 1904 following Panama’s independence from Colombia. The balboa has been pegged to the USD at a rate of 1:1, and the Balboa coins, identical in value and size, mix together the US coins, and US bank notes are the paper money. Panama’s $1 coin we reissued for mass adoption in 2011 with 40 million coins minted, and now is widely used along side the US paper dollar bills.

In 1941, President Arnulfo Arias was pressuring the government to enact Article 156 which would allow official and private banks to issue Panama’s own paper notes. As a result, El Banco Central de Emisión de la República de Panamá was established. The bank issued 2,700,000 paper Balbos in October of that year, but a week later, Ricardo Adolfo de la Guardia Arango replaced the sitting President in a coup supported by the United States. The new government quickly closed the bank, pulled back the issued notes, and destroyed all unissued bank notes. Very few of these of these called “Arias Seven-Day” notes are in existence today.

The Coins of Panama

The Banking System of Panama, and the Currency of Panama

More on Banking

With Panama’s towering skyscrapers in the city center, Panama City resembles a smaller sized Manhattan. With the most modern and successful international banking center in Latin America, with more than 90 banks from almost 40 countries. In 1998 Panama’s banking law (Decree No. 9) was amended to meet the international standards of banking transparency and regulation.

The Banking System of Panama, and the Currency of Panama

Panama has become one of the leading countries in support of FATF and OECD which cope with the problems of money laundering and financial activities of terrorism. Very tight controls have been put on Panama’s banks, to report movement activities in excess of $10,000, exactly as done in the United States. In addition, very strong KYC (know your customers) rules have been adapted for anyone opening a bank in Panama.

Panama has become the most secure international offshore center in the world. Also, the Panama Stock Exchanges in one of the fastest growing in the area. There are many diverse investment opportunities in banking, investment financing and insurance.

Foreigners can open a bank account in Panama, which has one of the strictest banks secrecy laws in the world, ensuring utmost privacy in your financial affairs. But you will have to provide more documentation, then even Europe of the United Sates.

Requirements for Opening a Bank Account in Panama

There is no simple rule to open a bank account in Panama, each bank will require different things. I hope this helps put together all the pieces.

The Banking System of Panama, and the Currency of Panama
There are three types of groups of foreigners that look to open bank accounts in panama, and each one has different requirements

1. Permanent Panama resident status with a cedula (Panama ID card) (Not USA citizen)
2. Foreigner, Not USA citizen
3. USA citizen (even with a cedula)

For citizens of the USA, there are some challenges with some of the banks, and opening an account. Some banks here, do not like the process and paperwork required due to FACTA (FATCA is the Act that requires all foreign banks report on Us Citizen-held accounts) to submit to the US government every year, so they just opt not to open accounts for US citizens. Or, they will only open an account if you are a permanent resident with a cedula.

1.) This is the easiest, and below is the paperwork you will require, some banks may require additional paperwork. With your Cedula in hand it really speeds thing up.

Copy of Passport and Cedula
An additional ID like a driver’s license
1 or 2 bank reference letters of current accounts (must be on bank letterhead, signed by manager and current within 60 days)
If you do not have your Cedula yet, a letter from your Panama lawyer that it is in process may be accepted.
You will be required to fill out a lot of KYC paperwork at the bank, and US citizens will have to sign a W-9.

2.) This one can take some time, but in addition to the above requirements, you have to prove that you have some ties to Panama, since you are not a resident yet. So, maybe you have a lease in Panama, or a utility bill in your name. In addition to this, everything listing above . . .and maybe more.

3.) First you need to find a bank that will open an account for US citizens (I list some below). Once you have that, the paperwork above is basically the same, but there may be more asked for, especially if you do not have a Cedula yet. Also, you will be asked what the money is for, and where did it come from on every large transaction in or out.

Some banks are now asking foreigners for Evidence of income / funds supporting: letter or proof of work, statement of income, proof of income. This is simple if you have a pension, can be more complicated if you are self-employed. You may also be asked for a professional reference, i.e. doctor, lawyer etc.

Some banks will require all documents above that are not in Spanish to be officially translated to Spanish.

Below are is list of banks that currently accept US citizens, but this list can change often, and there may be other smaller banks not on this list.

BAC (you must be official Panama resident)
Banco Azteca
Banco National

Some banks are easier than others, especially for US citizens.  Feel free to contact us with your situation, and we can suggest a bank to start with. In fact, if you are coming on one of our tours, we can arrange for you to open a bank account when you are here.

The minimum deposit to open a bank account in Panama varies bank by bank but is usually in the $1,000 – $2,000 range. Some banks, like I know Multibank, even has English option for online banking, which for me was essential when I first moved here, and I would have been quite scared doing my online banking in a language that I was not familiar with yet.

Banking here is not much different than in North America. You have debit cards with a pin, ATM’s scattered all over the place, and online banking where you can pay bills, and send next day ACH payments for $1 to anyone with a Panama bank. Sending/receiving wires is a bit more complicated and expensive. Lots of paperwork to fill out at the bank to send a wire, to receive, can cost as much as $50.

Some Things to Consider When Opening a Bank.

1. Checking or Savings
Most panama banks have charges for checking accounts, but none for savings. Checks really are not used a lot here in Panama, when you have opened a savings account, you will receive a debit card that can be used for purchases in most stores. Savings accounts pay interest, checking usually not.

2. Wording of Joint Accounts
Always set up a joint account as You OR Your Partner, not You AND Your Partner. If something happens, bad, like one of you die, or are incapacitated, and it is “AND” you will spend a lot of time trying to get access to your money.

3. Beneficiary Forms
Make sure you fill one of these out, especially if you do not have a will in place in Panama, or your money will be locked tight for a long time in case of your passing.

Savings Interest Rates in Panama

This will be surprising to many, savings accounts in panama actually pay a decent interest rate, as opposed to the 0.1% that north American banks are paying. I bank with Multibank, and in my last statement my savings account interest was 3% annually. Not bad. And 5-year term deposits, of $10,000 or more are 5%.

You can even get better rates, if you open an account at one of Panama’s Credit Unions, like Caja de Ahorros, I have seen term deposits recently advertised at 6%.

Banking Liquidity and Stability in Panama

Panama is much stricter in their reserve requirements than USA or European banks, requiring up to double the reserve that the FED does, which leads to more liquidity in the banking system. The reserve requirement are also help by the National Bank of Panama, asking as the Central Bank for all Panama banks, and holding part of this reserve.


The Banking System of Panama, and the Currency of Panama

In the 2008-09 global financial crisis, a few Panama banks experienced some liquidity issues due to some freezing of external credit lines. The National Bank of Panama was able to quickly set up a credit line to help, and by January 2009, the Panama Government had a 1.1-billion-dollar fund (5% of total deposits) set up, of which let than 10% was ever loaned out, and by the end of the year, the fund was no longer needed. Panama banks escaped the global crisis unscathed, unlike the USA or many European countries.

All in all, my experience with banking in Panama has been very good, and I certainly feel more secure with the Panama banking regulations than the North American ones.

On our Retire in Panama Tours, we will be talking about banking and hearing from a Bank manager about your options for banking. At the time you are ready to open a bank account, we will provide you with the most current information, so this task can be accomplished easily.


It’s more than a tour . . it’s an experience.