Overview of the FSM Banking System

The Financial System of the FSM comprises of Regulated and Non-regulated Financial Institutions.

Overview of the Regulated Financial Institutions:

Currently, there are two regulated commercial banks in the country. These banks are licensed by the Board, the Bank of Guam (BOG) and the Bank of the Federated States of Micronesia (BFSM). BOG is a foreign bank domiciled or incorporated in Guam, while the BFSM is a domestic bank. Both banks are US FDIC insured, and have established branches in all four States in the FSM: Yap, Chuuk, Pohnpei and Kosrae. The currency in use in the FSM is the US dollar.

The financial institutions that are under the regulatory and supervisory umbrella of the Board are those that accept deposits from the public. In fact, "banking business" is defined under 29FSMC to mean the business of accepting deposits of money from the public, withdrawable or payable on demand or after a fixed period or after notice, or any similar operation through the frequent sale or placement of notes or other securities, and the use of such funds either in  whole  or part for loans, investment or any other operation either authorized by law or considered a generally accepted banking practice, for the account and at the risk of the person doing such business. The general public is encouraged to contact these banks should there be any questions or further information needed: Bank of Guam (Corporate Office) and Bank of the FSM (Corporate Office).

Overview of the Non-regulated Financial System:

The non-regulated financial institutions are financial entities not under the regulatory and supervisory umbrella of the FSM Banking Board/Commission. In other words, these entities do not meet the definition of "banking business" under Title 29 of the FSMC.

These Institutions are:

(1) FSM Development Bank ("FSMDB"). FSMDB was established by Title 30 of the FSMC, as amended. The primary purpose of the FSMDB is to advance the economic development of the FSM through the provisions of economic development loans.

FSMDB has its headquarter in the State of Pohnpei and branches throughout the four States in the FSM: Yap, Chuuk, Pohnpei and Kosrae. FSMDB primarily offers loans to commercially viable projects and is authorized to provide loan guarantees to other financial institutions in the country. FSMDB can provide loans to commercially viable projects that are owned by FSM citizens of at least 25%. Shareholders of the FSMDB comprise of the FSM National Government (98.7%), Chuuk State Government (1%) and Kosrae State Government of (0.03%).

    Currently, FSMDB offers:
        a) Business Commercial Loans;
        b) Home or Housing Loans;
        c) Personal Consumer Loans

    Feel free to contact FSMDB at:
        P.O. Box M. Kolonia Pohnpei, FM 96941
        Phone: (691) 320-2840
        or visit its website at www.fsmdb.fm or Email to: info@fsmdb.fm

(2) FSM Health Insurance Plan ("MiCare");
(3) Insurance Companies;
(4) Credit Unions - There are several of these entities in the FSM;
(5) Money Transfers - There are several of these entities in the FSM;
(6) Housing Authorities

Banking and Banking Related Legislations:

    FSM Title 29
    FSM Title 36
    FSM Title 11

Banking Regulations:

    Dormant Accounts