The Central Bank of Bahrain (CBB) and the BENEFIT Company (BENEFIT) announced that the new Bahrain Cheque Truncation System (BCTS) will commence operations on 13th May, 2012. BCTS will replace the current paper based cheque clearing system in the Kingdom of Bahrain with a fully automated image-based cheque clearing system.
Shaikh Salman Bin Isa Al Khalifa, the Executive Director of Banking Operations, Central Bank of Bahrain, stated that the implementation of BCTS is a national initiative to modernise and improve efficiency of cheque clearing in Bahrain, in keeping with global trends. The implementation of the new system has been undertaken by BENEFIT and will be operated by BENEFIT under the guidance, supervision and oversight of the CBB.
BCTS would not change the current practice of writing and depositing of cheques by bank customers. This new system would speed up the clearing cycle for bank customers to get cheque proceeds on the same day (i.e. Sunday to Thursday), instead of the current two to three days.
With the introduction of BCTS, bank customers who deposit cheques at banks before 11:30 a.m. could get proceeds of their cheques on the same day they are deposited.
The new system is expected to enhance the efficiency of cheque payments of individuals and corporates. Furthermore, BCTS will reduce costs and risks associated with handling physical cheques and make banks’ operations more efficient.
Banks commenced issuing ‘image friendly’ cheques to customers as far back as January, 2010, well ahead of the launching of BCTS. Since BCTS is based on the electronic transmission of images and payment information, it is important for customers to use ‘image friendly’, new design cheques which comply with security and operational requirements of BCTS. Old design cheques that do not provide clear images may experience delays in clearing