NASSAU, BAHAMAS- The Central Bank of The Bahamas is reviving its stalled cheque-reduction initiative with a sweeping package of legislative reforms and policy changes aimed at modernizing the country’s payment systems and sharply curbing reliance on cheques. The regulator has released a detailed consultation paper outlining the steps required to transition The Bahamas toward payment-instrument neutrality and greater use of digital and electronic alternatives.
The renewed push follows the Bank’s 2022 engagement of external legal consultants to examine how cheque usage could be phased out. That analysis reviewed Bahamian laws governing negotiable instruments and assessed approaches taken by jurisdictions such as South Africa, Namibia, Canada, New Zealand, the United Kingdom and Barbados—countries that have already implemented frameworks to eliminate cheques. Their findings prompted the Central Bank to establish a Steering Committee of key stakeholders, leading to a revised objective focused on encouraging a reduction, rather than immediate elimination, of cheque usage. The Bank set a deferred timeline of December 2025 to revisit its overall policy.
The consultants’ report advised that a successful transition would require both policy changes and amendments to legislation that currently embeds cheques as a singular mandatory form of payment. The paper outlines proposals including implementing cheque item limits, mandating customer education by supervised financial institutions, and updating key laws such as the Bills of Exchange Act and Payment Systems Act to remove cheque-specific language and provide for substituted forms of payment.
A wide-ranging set of legislative amendments is proposed across statutes including the Partnership Limited Liability Act, Employment Act, Hotel Regulations, Supreme Court Act, Public Trustee Rules, Buildings Regulation Rules, Friendly Societies Act and the Parliamentary Elections Act. The Central Bank argues that modernizing these provisions to reflect payment neutrality—allowing payments to be made through financial institutions, electronic platforms, or other prescribed methods—will ensure the legal framework remains fit for purpose amid ongoing innovation.
The consultation paper also seeks public and industry feedback on potential rules for the continued but limited use of cheques. This includes views on the appropriate maximum cheque value, with the Clearing Banks Association proposing a $10,000 cap by December 31, 2026, and the Central Bank suggesting a $1,000 limit for cheques that can be cashed over the counter, with higher-value items required to be deposited.
