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EghtesadOnline: A total of 667,000 checks worth 104 trillion rials ($779 million) bounced during the calendar month to December 21, the Central Bank of Iran reported.

Bounced checks shot up 3.3% in value compared to a month earlier when 686,000 checks worth 100 trillion rials were rejected, Financial Tribune reported.

In volume terms, however, the number was down 2.7% on a monthly basis, the CBI website said. 

Bad checks accounted for 8.3% of the total number of negotiated checks and 10.5% of the value of drawn checks.

In the reviewed period, about 198,000 checks valued at 48 trillion rials ($359.5 million) bounced in Tehran Province, accounting for 7.5% and 9.5% of volume and value of drawn checks in the capital of more than ten million people. 

The ratio of bad checks to transacted checks in Kohgilouyeh-Boyerahmad Province was 16.4%, the highest among all provinces. 

Chaharmahal-Bakhtiari Province was next with 12.5%. Lorestan Province came in third with 11.6%.

The lowest ratios were registered for Gilan (6.5%), Yazd (7.1) and Alborz (7.4). Checks were not passed due to insufficient funds in the issuers’ bank accounts. More than 641,000 checks worth 97 trillion rials ($726.6 million) were returned because there was no money in the check issuers’ accounts or the amount was insufficient.

CBI has stepped up efforts in recent years to cut down the number of bad checks to help reduce losses inflicted on bank customers. One such measure introduced this month is the duty of banks and credit institutions to send to the CBI the names of checkbook holders who have had more than 20 bounced checks. 

Lenders are required to report the names of issuers of bad checks every six months, once at the end of the calendar month to September 22, and the other at the end of Iranian fiscal year on March 19.  

 

Passed Checks 

The CBI report shows that during the mentioned period eight million checks worth 983 trillion rials ($7.36 billion) were issued by holders of checkbooks. This was up 17.6% and 5.6% in value and volume, respectively.

Out of all checks drawn in the month, 2.6 million worth 507 trillion rials ($3.8 billion) were passed in Tehran Province. 

Tehran represented almost a half of the value of total checks issued across the country and 32.9% of the number of checks. Isfahan Province was second followed by Khorasan Razavi Province. 

Cashier Checks 

Banks processed more than 808,000 cashier checks with the total value of 1,230 trillion rials ($9.21 billion), indicating 2.7% and 4.4% hike in volume and value, respectively.

Almost a quarter of cashier checks worth 691 trillion rials were passed 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.

The CBI report covered only interbank checks processed by Chekavak, a CBI-affiliated electronic check processing system, and did not include checks circulated within branches of any single bank.  

 

Iran Central Bank of Iran Rise Bad Checks Bounced