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EghtesadOnline: The number of bad checks fell by 11.7% in the calendar month ending June 20, compared to a month earlier, the Central Bank of Iran reported.

Data published on the CBI website show that 881,000 checks were not processed by banks in the mentioned month.

In value terms, bad checks were worth 186 trillion rials ($808.6 million), increasing 11.2% compared to the earlier month. 

Bad checks accounted for 11.2% and 12% of all drawn checks in the month in terms of volume and value, respectively. The percentages were higher when compared with the same month last year when checks with 9.4% in volume and 11.1% in value were returned.

In the reviewed period, about 269,000 checks worth 87 trillion rials ($378m) bounced in Tehran Province, accounting for 10.6% and 11% in volume and value of bad debt. 

In terms of numbers, Kohgilouyeh-Boyerahmad Province topped the list with the highest ratio of bad checks to transacted checks at 18.1%.

Chaharmahal-Bakhtiari Province was next at 15% and Kurdistan third with 14.6%.

Provinces with the lowest ratio were Gilan at 7.7%, Alborz 9.5% and Mazandaran 10%.

Insufficient funds in the accounts of issuers were the main reason why the checks were rejected. More than 858,000 checks worth 173 trillion rials bounced because of not sufficient funds (NSFs).


Drawn Checks

More than 7.9 million checks worth 1,544 trillion rials ($6.7b) were issued in the month. The number of drawn checks went down 1.2% while value increased 13.7%, compared to the earlier month.

Out of all checks drawn in the month, 2.5 million valued at 789 trillion rials ($3.58b) were issued in Tehran Province, making it the province with the highest volume and value of drawn checks, accounting for 32.2% and 51.1% of all drawn checks, respectively.

Isfahan Province was second both in volume and value, representing 10.4% of all drawn checks and 6.4% of the value.

About 7 million checks were cleared by banks in the month, indicating 0.4% increase in volume compared to a month earlier. Value of cleared checks was 1,358 trillion rials ($6.17b), showing 14.1% monthly rise.

During the month 2.3 million checks valued at 702 trillion rials ($3.19b) were cashed in Tehran Province.



Cashier Checks 

Around 683,000 cashier checks worth 1,168 trillion rials were cleared by the banks indicating 3.4% and 6.6% decline, respectively in volume and value.  

More than 208,000 checks worth 628 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.

The CBI 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.


Iran central bank Checks Bad Debts