The Central Bank of Iran said Sunday electronic checks can be processed electronically without referring to bank branches. Mehran Mahramian, the CBI deputy for innovative technologies said banks, however, will continue issuing print checks.
"Electronic checks are a new ecosystem and we are hopeful businesses will start using it. As such, we have no plans to discontinue [the use of] print checks," IBENA quoted him as saying.
All banks are obliged to accept electronic checks, Mahramian noted.
A new electronic check system was unveiled in mid-November. As per a 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 and validated by digital signature.
An electronic check is a form of payment via the internet or another data network crafted to perform like any conventional paper check. As the check is in an electronic format it is processed faster and cuts 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.
According to the CBI, e-checks will be made available to legal persons by mid-2023 because the procedure for such entities is complex due to the multiple signatures.
The procedure of issuing an e-check is the same as a paper check wherein permission is granted to issue a checkbook, the check information is recorded in the Sayyad system and its authenticity is controlled. If, for any reason, the check bounces, the system transmits the information 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.
Last year, 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 enhances authenticity.
