The overall value of checks rejected in the month to February 19 shot up 30.08% compared to the earlier month to reach 470 trillion rials ($1.04 billion).
By the end of the month the number of bad checks stood at 616,000 -- up 36.8% in one month, according to data released by the Central Bank of Iran.
In terms of volume and value, bad checks accounted for 7.3% and 9.2% of all drawn checks, respectively.
It’s merits mention that during the same period last year 9% and 12.3% of the volume and value of all drawn checks bounced.
In the said period, about 187,000 checks worth 208 trillion rials ($462.22 million) were worthless in the capital Tehran, accounting for 6.7% and 8.4% of volume and value of drawn checks in the sprawling metropolis of more than ten million people.
In terms of numbers, Kohgilouyeh-Boyerahmad topped the list of provinces with the highest ratio of bad checks to transacted checks at 12.7%.
North Khorasan Province was next at 11% and Chaharmahal-Bakhtiari Province third with a ratio of 10.4%.
Provinces with the lowest ratio were Gilan at 5.3%, Khouzestan 6.6% and Alborz 6.7%.
Insufficient funds in the accounts of issuers were the main reason why the checks were rejected.
During the period under review, more than 595,000 checks worth 454 trillion rials bounced because of insufficient funds.
Checks that bounced due to these two reasons accounted for 96.6% and 96.7% of the total bad checks, respectively, in volume and value.
Drawn Checks
More than 8.4 million checks worth 5,085 trillion rials ($11.3 billion) were drawn in the month. The number of drawn checks rose 27.3% and the value increased 20.7% on the month earlier.
Of the total drawn checks in the month, 2.8 million valued at 2,503 trillion rials ($5.56 billion) were issued in Tehran Province.
Tehran ranked first with the highest volume and value of drawn checks, accounting for 33.1% and 49.2% of all drawn checks, respectively.
Isfahan Province was second both in volume and value with 10.6% of all drawn checks and 7.5% of the value of checks.
Cleared Checks
An estimated 7.8 million checks were cleared by banks during the month, indicating 26.6% rise in volume compared to the earlier month.
The total value of cleared checks was 4,615 trillion rials ($10.25 billion) or 19.7% higher on the month.
During the month about 2.6 million checks valued at 2,295 trillion rials ($5.1 billion) were cashed in Tehran Province. Cleared checks in and around the capital accounted for 93.3% of the total volume and 91.7% of the total value of checks drawn in Tehran.
Cashier Checks
Around 447,000 cashier checks worth 1,980 trillion rials were cleared indicating 10.5% rise in volume and up 10.8% in value. More than 137,000 checks worth 1,027 trillion rials were cashed in Tehran alone.
A cashier's check is a check guaranteed by a bank, drawn on the bank's own funds and signed by a cashier. Cashier checks are treated as guaranteed funds because the bank, rather than the purchaser, is responsible for paying.
The CBI report covered interbank checks processed by Chekavak, a CBI-affiliated electronic check processing system, which does not include those circulated within branches of any single bank.
Measures to curb bad checks became law in 2018 as part of amendments to the Check Issuance Law. The central bank says it is planning new measures to maintain and improve the credibility of checks as a reliable financial instrument.
