Bad checks worth 299 trillion rials ($1.1 billion) bounced in the month to August 22, indicating a 30.8% rise over the preceding month.
According to Central Bank of Iran data, the number of bad checks stood at 742,000, also rising 32.4% rise in one month.
The checks accounted for 10.7% and 14.8% of the total volume and value of the drawn checks during the month.
Bad checks rose despite the fact that a decline was expected after the new check law came into effect on March 25 to improve trade, transparency and curb fraud and forgery in bank transactions.
Earlier Ameneh Nadali-Zadeh, the CBI deputy of the Payment Systems Department, said the percentage of bounced checks issued under new rules was 4.6% since the beginning of the fiscal year in March until July 21, while the figure for old checks was 9%.
Bad checks in Tehran Province represented 10.4% and 13% of all checks drawn in the metropolis in terms of volume and value, respectively.
In sum, 220,000 checks worth 132 trillion rials ($488 million) were rejected in Tehran. Kohgilouyeh-Boyerahmad Province as usual ranked first as the region with the highest ratio of bounced checks to transacted checks at 14.6%.
North Khorasan Province was next at 14.1% and Kurdistan Province at13.8%.
Provinces with the lowest ratio were Gilan with 7.8%, Khouzestan 8.9% and Yazd 9.3%. Insufficient funds in the accounts of issuers were the main reason why the checks were rejected.
Drawn Checks
During the period under review the number of issued checks rose 13.4% to reach 6.9 million. In terms of value the transacted checks rose 4.8% to stand at 2,023 trillion rials ($7.5b) in the month ending August 22.
More than 2.1 million checks valued at 1,019 trillion rials ($3.77b) changed hands in Tehran Province. The capital registered the biggest share of exchanged checks in volume and value accounting for 30.6% and 50.4% of all drawn checks.
Isfahan Province was next at 11% of all drawn checks and 7.1% of the value of checks issued in the month.
Banks processed more than 421,000 cashier checks worth 930 trillion rials ($3.44 billion), indicating 12% and 7.4% monthly fall in volume and value, respectively. More than 141,000 checks worth 510 trillion rials were cashed in Tehran.
A cashier's check is a check guaranteed by a bank, drawn on the bank's own funds and signed by a cashier. Cashier's checks are treated as guaranteed funds because the bank, rather than the purchaser, is responsible for paying the amount.
Numbers presented in the report covered only interbank checks processed by Chekavak, a CBI-affiliated electronic check processing system, and did not include checks that circulate within branches of a single bank.
