Shura Council endorses legislation permitting banks to issue partial cheque payments to beneficiaries

TDT | Manama

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Shura yesterday passed a legal change allowing banks to pay out whatever funds are in an account when a cheque is cashed, even if the amount falls short of the total. The move alters how bounced cheques are dealt with and gives beneficiaries the chance to recover part of the sum straightaway, with the rest to be claimed later through legal means.

The draft law amends Bahrain’s Commercial Law, first issued by decree in 1987. It has been sent to the Speaker of Parliament, who is expected to refer it to the Cabinet and, in turn, to His Majesty King Hamad bin Isa Al Khalifa. The new provisions cover Chapter Three of the law, which deals with cheques. Under the changes, banks would no longer be expected to reject a cheque outright if the account lacks enough funds. Instead, they would pay out what is available.

Balance

The remaining balance could then be pursued by the holder through channels set out in the law. According to the rapporteur of the Shura’s Financial and Economic Affairs Committee, Sadiq Eid Al Rahma, the changes respond to long-standing issues in how cheques are handled. “This gives the cheque more strength and flexibility,” he said during the session.

“It remains a means of payment, but with fewer practical snags.” He added that allowing partial payment would keep money moving through the system rather than tying it up in frozen accounts.

Value

“People are less likely to rush to court or press criminal charges if they’re able to recover part of the value straight away,” he said. The idea was first brought forward in 2022, when members of the Shura proposed an amendment to Article 465.

It was agreed at the time, and the government has now returned with a draft law based on that proposal. Khalid Al Maskati, one of the longest-serving members of the chamber, backed the measure. “It’s a sound move,” he said. “It helps traders, it keeps money flowing, and it means fewer outright rejections of cheques by banks. Most importantly, it preserves the rights of the person holding the cheque.”

Conditions

The law also gives the Central Bank of Bahrain the task of deciding how the new system will work in practice, including how much is to be paid and under what conditions. Banks will be able to pay the whole amount if the balance allows, or only part if it does not.

The cheque holder, in either case, keeps the right to claim the rest. Another clause in the draft law makes it a criminal offence to issue a blank cheque as a form of guarantee or loan, a practice that has drawn repeated criticism from lawyers.

Questions

Jamal Fakhro, the Council’s first deputy chairman, raised questions over how the change would be applied.