Bad checks Increased sharply in the calendar month to May 21 amid slower growth in the number of total check transactions, the Central Bank of Iran said.
There were 670,000 bad checks in the month -- 17.8% higher compared to the month before. However, compared with the corresponding month last year the number was down 32.9%.
In value terms, the bad checks jumped nearing 232 trillion rials ($928 million), indicating a whopping 46.3% hike on monthly basis. Such checks also increased 38.7% in value compared with same month last year.
Bounced checks accounted for 9% and 11.9% of the total volume and value of drawn checks in the month.
Bad checks in Tehran Province accounted for 8.4% and 10.8% of all checks drawn in the capital in volume and value, respectively.
During the period the number of rejected checks in Tehran reached 182,000 worth 100 trillion rials ($400m).
As often, Kohgilouyeh-Boyerahmad Province ranked first with the highest ratio of bounced checks to transacted checks at 16.7%. Ilam Province was next at 14.3% and the ratio for North Khorasan was 13.7%.
Likewise, provinces with the lowest ratio were Gilan 6.7%, Isfahan and Yazd 8% each and the northern Mazandaran region 8.2%.
Insufficient funds were the main reason why the checks were canceled. During the month more than 648,000 checks worth 223 trillion rials bounced because of not sufficient funds (NSFs) or there was no money in the issuers’ account.
In late March, the CBI revised rules for checks to improve transparency in the check system and curb rubber and forged checks. It introduced new checkbooks designed to comply with the latest regulations.
As per the new rules, check holders are obliged to register their complete ID on electronic portals created by the CBI. Banks have been barred from accepting checks not registered on the portals.
Drawn Checks
During the period under review the number of issued checks rose 7.6% to reach 7.5 million. In value terms the checks rose by 31.3% rise to stand at 1,943 trillion rials ($7.77 billion).
More than 2.2 million checks valued at 932 trillion rials ($3.72 b) were traded in Tehran Province in the month. Tehran had the highest share of exchanged checks in volume and value accounting for 29% and 48% of all drawn checks.
Isfahan Province was next both in volume and value with 11.1% of the total all drawn checks and 7.1% of the value of checks.
Banks processed more than 503,000 cashier checks worth 942 trillion rials ($3.76b), indicating 34% and 29.2% monthly rise in volume and value, respectively. More than 160,000 checks worth 502 trillion rials were cashed in Tehran.
A cashier's check is a check guaranteed by a bank, drawn on the bank's own funds and signed by a cashier. Cashier's checks are treated as guaranteed funds because the bank, rather than the purchaser, is responsible for paying the amount.
