The purpose of the contents of this Section is to set out Rules relating to the system of penalising any person, whether natural or corporate in form, (referred to as a 'customer' in this Chapter) whose cheque is:

(a) Presented for payment, but is returned due to insufficient funds being available on his current account, where,
(b) In the opinion of the bank on whom the cheque is drawn, such cheque has been issued by the customer in bad faith.

Cheques falling within this system are referred to as 'dishonoured cheques'. Due regard must be given by retail banks to the general provisions of Bahrain Law regarding joint accounts, partnership accounts and accounts in the name of corporate entities, as well as to the customer mandate in each case, to determine how such accounts may be dealt with for purposes of the Rules in this Chapter.

Amended October 2012
Amended January 2011
October 2007