A new electronic check system was unveiled in Tehran on Saturday. The Deputy for Innovative Technologies at the Central Bank of Iran, Mehran Mahramian, told IRNA that the e-check system involved complexities given the litany of legal and technical features.
As per the new check law, the digital secure check system (aka Checkad) will operate with electronic checks.
An e-check is a new form of check subject to the same regulations for printed checks. E-checks are validated by digital signature.
An electronic check, or e-check, is a form of payment via the internet or another data network crafted to perform like any conventional paper check. Because the check is in an electronic format it is processed faster reducing bureaucratic hassles.
Using the platform one can issue digital checks with an electronic signature. It also improves oversight of the CBI and commercial lenders over check transactions.
Generally, the cost of issuing electronic checks is less than paper checks with the added benefit of safeguards against fraud and theft.
“The electronic check system now provides e-checks for natural persons in Tejarat Bank, Bank Saderat and Parsian Bank. It will soon be available in Bank Keshavarzi, Ayandeh Bank and Bank Mellat,” Mahramian said.
According to the CBI, plans have been made to first provide e-checks to natural persons and six months later to legal persons. The procedure for the latter is rather more complex due to the multiple signatures required in legal checks.
The procedure of issuing an e-check is the same as that of a paper check, wherein permission is granted to issue a checkbook, the check information is recorded in the Sayyad system and the check status is controlled. If, for any reason, the check bounces, the system transmits the information of the check to all banks.
However, the image of an e-check is different from that of a traditional check. Checkad provides a transaction receipt to the person issuing the check, after it is deposited in the recipient’s account.
In January the Informatics Services Corporation, affiliated to the CBI, unveiled its digital check payment platform, called Checkad, as an improved replacement for paper checks.
Checkad offers 30 types of services. Users can apply for digital checkbooks, issue e-checks, use such checks as guarantee, block payment and track the clearance process.
Measures against bad checks became law in 2018 as part of amendments to the Check Issuance Law. The CBI introduced digital checks after designing an integrated electronic check system and streamlined current electronic check-processing platforms, namely Sayyad and Chekavak.
Sayyad is designed to run a credibility check on account holders wanting to write a check. Chekavak is an electronic check processing system eliminating the physical circulation of checks and enhance credibility.
Mahramian said that measures taken over the past few years to amend the check law had significantly reduced the number of people incarcerated for bad checks.
“In fiscal 2017-18, around 10 people were detained every day for issuing bad checks. Today, the number is one.”
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