The value of bank checks rejected in the calendar month to April 20 declined 37.6% from the earlier month to reach 207 trillion rials ($690 million).
Bad checks in terms of numbers stood at 471,000, down 24.2% in one month, according the Central Bank of Iran reported.
Compared with the corresponding month of the last fiscal year, when the new check law came into force, the rejected checks dropped 24.2% in number.
The sharp decline in part is attributed to the revised check rules that came into effect in March 2021 to help improve transparency and accountability and discourage fraud.
In value terms, however, bounced checks increased 30.4% on the same month a year before. The rise could be linked to the steep increase in consumer prices over the course of the year, which apparently ramp up the value of transactions.
In terms of volume and value, bad checks accounted for 9.1% and 11.2% of all drawn checks in the month, respectively.
During the corresponding period last year 8.2% and 10.7% of the volume and value of all drawn checks were rejected by the banks.
The CBI report covered only interbank checks processed by Chekavak, a CBI-affiliated electronic check processing system, and did not include checks circulated within branches of a single bank.
In the reviewed period, about 131,000 checks worth 87 trillion rials ($290 million) bounced in Tehran Province, where the capital is located. The figure accounts for 8.4% and 9.7% of volume and value of drawn checks in the sprawling metropolis.
In terms of numbers, Kohgilouyeh-Boyerahmad Province topped the list of provinces with the highest ratio of bad checks to transacted checks at 14.6%.
Lorestan Province was next at 12.6% and North Khorasan Province third with a ratio of 12.4%.
Provinces with the lowest ratio were Gilan at 6.6%, Mazandaran 8% and Alborz 8.1%.
Insufficient funds in the accounts of issuers were the main reason why the checks were rejected.
Drawn Checks
More than 5.2 million checks worth 1,838 trillion rials ($6.1billion) were written in the month – down 26% in number and 38.6% in value from the earlier month.
Of all the checks drawn in the month, 1.6 million checks worth 899 trillion rials ($3 billion) were issued in Tehran Province.
Tehran ranked first as the province with the highest volume and value of drawn checks, accounting for 30% and 48.9% of all drawn checks, respectively.
Isfahan Province was second both in volume and value, representing 10.4% of the total drawn checks and 7.2% of their value in the month.
An estimated 250,000 cashier checks worth 1,403 trillion rials ($4.6 billion) were cleared by the banks showing 52.7% decline in volume and 40.3% in value.
More than 74,000 checks worth 1,068 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.
