Bahrain’s Commercial Law has been significantly reformed under Law No. (23) of 2025, introducing modernised provisions on cheque enforcement, joint account regulation, and consumer protection.

The key reforms include:

1. Direct Enforcement of Partially Paid Cheques
   Under Article 465 bis (1), a cheque marked by the bank for insufficient funds or partial payment is now immediately enforceable under the Execution Law, allowing holders to pursue execution directly without first initiating civil proceedings. Article 465 bis further requires that, if the account balance is insufficient, the drawee bank must pay the available amount (unless the holder refuses). The bank must then mark the cheque to indicate partial payment and provide the holder with both the original cheque and a certificate of the amount paid.
2. Prohibition of Blank Cheques as Guarantees
   To strengthen consumer protection and curb risky financial practices, Article 491 now explicitly prohibits issuing blank cheques as credit guarantees or security instruments. Article 491 bis imposes strict penalties for violations: issuers of such blank cheques face substantial fines, and holders who complete and present them may also be subject to significant financial penalties.
3. Regulation of Joint Bank Accounts
   The legal handling of joint accounts has been amended under Article 283(4). If a joint account holder dies or becomes legally incapacitated, the surviving holders are required to notify the bank within ten days. Importantly, the bank is now mandated to freeze only the share of the affected holder, rather than the entire account, until the court appoints a legal successor. This approach minimizes operational disruptions and facilitates ongoing business continuity, marking a clear departure from previous practice.
4. Enhanced Consumer Protection and Regulatory Oversight
   Law No. (23) of 2025 also strengthens consumer protection and regulatory oversight across Bahrain’s commercial sector. Both the Central Bank of Bahrain and the Consumer Protection Directorate (under the Ministry of Industry and Commerce) have expanded authority to monitor the enforcement of the new cheque regulations, including partial payments, blank cheques prohibitions, and credit record procedures

These reforms are intended to foster a more reliable financial environment, support creditor rights, and promote confidence in Bahrain’s commercial transactions by providing more direct and effective civil remedies.

What this means for businesses

If your operations involve issuing or receiving cheques, managing joint accounts, or extending credit, you may need to update internal procedures, contractual documentation, and compliance protocols to align with the new legal framework.

For tailored legal guidance, please contact ASAR’s Bahrain team at ASARBH@asarlegal.com. We are available to advise on implementation, risk mitigation, and strategic next steps.