The Central Bank of Iran said it has put into effect major parts of the Check Issuance Law, outlining a timeline for enforcing the remaining segments.
The new legislation was passed by parliament in Nov 2018. The CBI said depriving disruptive checkbook-holders of loans and other banking facilities, conducting regular credibility assessment of checkbook holders and inquiries about check transactions of those owning checkbooks have been realized.
Last year the CBI required all check transactions to be registered on a special electronic platform, named Sayyad. The system runs credibility checks on account holders wanting to write a check.
As per the new rules, check transactions must be registered at the Sayyad platform. Refusing to do so, banks do not clear the checks.
Checkbook holders also are banned from issuing "bearer checks". As the name suggests, bearer checks are payable to the person who brings the check to the bank.
Launching electronic checks is an essential component of the new law, which the CBI said will be fully operational by the time the present fiscal year is out in March 2022.
The bank said that is has streamlined check transactions platforms for issuing electronic checks. An e-check is a form of payment made via the internet designed to perform the same function as a conventional paper check. An electronic check has more security features than the standard paper checks.
The CBI also will enforce provisions of the check law that allows banks to withdraw money from other accounts owned by the check writers in other banks whose checks bounce.
In addition, if a check bounces due to insufficient funds, courts are authorized to seize the amount from other assets of the signatory of the check.
Given the role and significance of checks, rules governing check issuance have so far been revised seven times. The last time was in Nov 2018.
