The new check issuance and operational rules came into effect on the first working day of the new fiscal year on March 25.
It is designed to improve transparency in check transactions by obliging check holders to register data on electronic platforms designed by the Central Bank of Iran, according to a press release on the bank's website.
The new law was first announced last December, but its implementation was deferred "to allow a smooth transition" from old procedures and improve public awareness.
As per law passed by parliament in Nov. 2018, the CBI had two years to prepare the infrastructure for the new rules. Electronic checks are an essential component of the law. Electronic checks will replace conventional paper checks as part of the amendment to the Check Issuance Law.
The new framework is expected to increase transparency and curb rubber and forged checks. The CBI has designed an integrated electronic system and streamlined electronic check-processing platforms, namely ‘Sayyad’ and ‘Chekavak’, for issuing digital checks.
Sayyad is a system designed to run a credibility check on account holders wanting to write a check. Chekavak is an electronic check processing system for eliminating the physical circulation of checks and help improve credibility of checks.
Check issuers are required to register data such as date of issuance, sum, and identity of the beneficiary with the Sayyad platform.
Banks will not process checks that are not registered on this platform. The Sayyad system is accessible to check holders via banks’ internet gateways as well as cellphone applications.
The law also bans checkbook holders from issuing "bearer checks". As the name suggests, bearer checks are payable to the person who brings the check to the bank.
In addition, the new rules penalize those who acquire a checkbook through fraudulent means and bank staff who violate the law.
Depriving unlawful checkbook-holders the right to loans and other bank facilities are also enshrined in the law. Access to checkbooks will be difficult and the eligibility and credibility of applicants will be thoroughly verified.
Rules also stipulate tougher measures against defaulters. If a check bounces due to insufficient funds, courts are authorized to seize the amount from other assets of the signatory of the check.
Given the role and significance of checks, rules governing check issuance have been revised seven times, the last in Nov. 2018.
