In the first 8 months of the fiscal year (starting March 21, 2014) 42,000 checks bounced in Iran.
Hopes are high that with the implementation and spread of a national unified electronic check exchange system (Chekavak), the credibility of checks would increase and the alarming number of bounced checks would decrease.
Recent statistics indicate that during the first 8 months of the year, more than 31 million checks worth $27 billion have been exchanged in Iran’s clearing houses. In other words, compared to the same period last year the number of checks have increased by 6.3 and the value by 15.8 percent.
According to a report released by the Central Bank of Iran (CBI) during the period, 3.9 million of the checks worth $14 billion bounced telling of a 19.8 percent increase in number and a 29.8 percent increase in value, compared to the same period last year.
During a one month period (starting October 23), nearly 4.1 million checks worth $34 billion have been exchanged indicating 3.6 percent growth in number, as compared to the same period last year. Out of these checks, 541,000 worth approximately $2.5 million were bounced. This tells of a 22.2 percent increase in number and a 28.3 percent increase in value.
The CBI had proposed that if and when Chekavak is up and running, physical exchange of checks between and among banking networks would become a thing of the past, the disconcerting number of bounced checks would reduce, and check credibility will be restored.
According to CBI, other benefits of the new system include time-efficiency, minimized security issues, reduction of banking costs, and the eradication of clearing houses. The system will be constantly monitored online by CBI thus data will reach the bank directly needless of any intermediates. Banks would therefore be able to assess the reliability and verify the validity of individuals wanting to receive new check books.
With increased transparency, trust levels would increase between check drawers and receivers.
Additionally, with a better understanding of their balance, individuals will be more mindful when drawing checks; eventually, overdrafts would decrease.
