EghtesadOnline: Central Bank of Iran monthly report shows bad checks declined in number in the calendar month to May 20 but their value increased.
Bad checks were worth 167 trillion rials ($870 million) by the end of the month to May 20 -- up 28% on a monthly basis.
The number of bounced checks stood at 999,000 during the period, showing a decline of 10.3%, the CBI website said.
Bounced checks accounted for 12.5% of the total number of checks and 12.3% in value of checks drawn during the month.
In the reviewed period, about 332,000 checks valued at 78 trillion rials ($410 million) bounced in Tehran Province, accounting for 13% and 11.2% of volume and value of drawn checks in the capital, respectively.
The ratio of bad checks to transacted checks in Kohgilouyeh-Boyerahmad Province was 19.8%, the highest among all provinces. Kurdistan Province was next with 16.5%.
Hormozgan Province came in third with the highest ratio of bad checks to transacted checks with 15.9%.
Likewise, provinces with the lowest ratio were Gilan at 9.1%, Hamedan at 9.8% and Kermanshah 10.4%.
Sign of Hope
According to the CBI, drawn checks rose from 6.1 million to 8 million to show a significant 30.9% hike during the month in volume terms.
The overall value of drawn checks reached 1,358 trillion rials ($6.9 billion) to indicate a whopping 108.3% monthly rise, a sign that the economy is moving away from the coronavirus recession as businesses came back.
A similar report covering electronic payment industry in the country during the month showed that volume and value of electronic payments rose 35.6% and 101% eaach.
In the earlier month (March 20- April 18 marking the apex of coronavirus spread in Iran) checkbook holders had written 6.1 million checks worth 652 trillion rials ($3.4 billion), down 36% in number and 56.4% decline in value on monthly basis. In the same month, rubber checks mounted 7.4% monthly, reflecting the economic downturn as Covid-19 hammered economies big and small.
During the month to May 20, more than 2.5 million checks worth 698 trillion rials ($3.54 billion) changed hands in Tehran Province, accounting for 31.9% and 51.4% of all drawn checks in volume and value terms.
Isfahan Province was next representing 10.8% of all drawn checks and 6.5% of the value of checks issued in the month.
The number of processed checks rose 40.1% to reach 7 million. In terms of value the checks processed by banks jumped 128.4% to reach 1,191 trillion rials ($6.04 billion) in the month.
CBI data excludes checks circulated within branches of a single bank and only covers interbank checks processed by Chekavak, a CBI-affiliated electronic check processing system.
More than 707,000 cashier checks with the total value of 1,251 trillion rials ($6.35 billion) were processed by banks, showing 164% and 141.1% hike in volume and value, respectively.
A total of 213,000 checks worth 704 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.