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The Shura Council is set to debate, during its weekly session on Sunday, amendments to the 1987 Commercial Law aimed at tightening regulations on the use of cheques, improving banking procedures and enhancing consumer protection.
The changes were approved by Parliament last month and are supported by major entities including the ministries of Industry and Commerce and Justice, Islamic Affairs and Endowments, the Central Bank of Bahrain (CBB), Bahrain Chamber and the Bahrain Businessmen’s Association.
Mr Al Maskati
“The amendments represent a critical step forward in protecting both consumers and businesses from common financial pitfalls,” said Shura Council financial and economic affairs committee chairman Khalid Al Maskati.
Among the most important amendments are those targeting the misuse of cheques as a form of credit security, a practice that has led to countless disputes and legal cases.
“To curb financial malpractices, the new law explicitly prohibits the issuance of blank cheques as guarantees,” said Mr Al Maskati.
Under the revised law, cheque holders will gain stronger legal standing if a cheque is not honoured.
The amendments state that a bill holder can demand payment from all endorsers, the issuer and any obligated party if the cheque bounces.
Once certified, the cheque amount must be frozen in the drawer’s account until the cheque is presented.
If payment is opposed or disputed, the bank is required to freeze the cheque amount and await resolution.
The law also introduces new measures for joint bank accounts, particularly in the event of a co-owner’s death or legal incapacitation.
Surviving account holders must notify the bank within 10 days.
The bank must freeze the deceased’s share of the funds until a legal successor is determined.
“This ensures fairer distribution of wealth among rightful heirs and prevents unauthorised access to funds,” said Industry and Commerce Minister Abdulla Fakhro.
“It’s a crucial safeguard in modern financial systems.”
Justice, Islamic Affairs and Endowments Minister Nawaf Al Maawda added that the amendments align with Bahrain’s principles of justice and existing financial regulations.
The CBB emphasised that robust laws are essential to safeguard all parties involved in financial transactions.
Meanwhile, the Bahrain Chamber has called for strengthening the role of consumer protection authorities in dealing with cheque-related complaints and urged access to Bahrain’s national credit rating system to help businesses assess financial risk more accurately.
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