Economy, Business And Markets

Chekavak Operational

Chekavak OperationalChekavak Operational

C hekavak, an electronic check processing system, is to go operational in Tehran from Saturday with the primary target of eliminating the circulation of physical checks in the banking system and a secondary target of increasing check credibility.

By introducing Chekavak, the Central Bank of Iran has actually sought to organize checks and check transaction. The Iranian banking system has recorded 23 million bounced checks in the past four years, threatening the stability and security of this sector and the market in general, according to Central Bank Governor Valiollah Seif.

With Chekavak going operational, the verification of checks and the clients’ financial status will be computerized and can be accessed by the bank instantly.

Previously, it took at least 48 hours for checks to be cleared. But with Chekavak, a photo of the check is sent to the original bank for verification, thus, reducing clearance time to below 24 hours.

Currently Chekavak is being operated in 12 provinces and it is set to be operational throughout the country before the end of March.

The electronic system utilizes special encryption to prevent counterfeiters from changing check photos via computer software, according to the central bank’s Information Technology and Communications executive.

Once Chekavak goes operational check books will be standardized in size and formatting.

Seif has expressed hopes that Chekavak and the electronic verification of credit will create conditions where issuance of check books will take minimum amount of time with maximum accuracy. The CBI’s governor has criticized the conditions under which banks have issued check books leading to the high number of bounced checks.

The governor has also said that Chekavak will bring security, stability and trust back to check market with the elimination of physical check circulation between commercial banks.