Check Transactions Improve
EghtesadOnline: A fter a sharp decline in check use a month before, check transactions rebounded in the eighth month of the calendar month to Nov.21.
According to data published by the Central Bank of Iran, during the period the number of issued checks jumped 30.2% to reach 7.1 million.
In value terms, the drawn checks climbed 24.9% to stand at 2,505 trillion rials ($8.6 billion) in the month. A month before, check transactions plunged 25.7% and 19.8% in volume and value, respectively, reaching 5.4 million checks worth 2,005 trillion rials ($6.9b).
The drop in check transactions was linked mainly to the overall decline in demand for goods and aversion to buy on credit due to the economic uncertainty. However, the surge in transactions last month is seen as a sign of relative improvement in the long-sluggish business activity.
More than 2.2 million checks worth 1,285 trillion rials ($4.4b) changed hands in Tehran Province in the month. Tehran had the highest share both in volume and value accounting for 30.7% and more than half of all drawn checks.
Isfahan Province was next representing 10.9% of all written checks and 6.8% of the value of checks issued in the month.
More than 6.4 million of all drawn checks were processed by banks during the month.
Bounced checks rose in tandem with the rise in check transactions. Checks worth 305 trillion rials ($1.08 billion) were rejected by banks indicating a 16.3% hike on the month before.
In term of volume, the rejected checks reached 630,000 – up 32.5% in one month. Rubber checks accounted for 8.9% and 12.2% of the total volume and value of the drawn checks, respectively.
Bad checks in Tehran Province accounted for 8% and 11.3% of all checks drawn in the capital in terms of volume and value, respectively.
During the period under review, the number of checks returned in the capital reached 172,000 worth 145 trillion rials ($500 million).
Kohgilouyeh-Boyerahmad Province ranked first with the highest ratio of bounced checks to transacted checks at 16.3%.
Chaharmahal-Bakhtiari and Lorestan provinces were next each with a 12.4% while the ratio for Kurdistan Province was 12.3%.
Provinces with the lowest ratio were Gilan with 6.5%, Khouzestan with 8% and Alborz with 8.1%. Insufficient funds in the accounts of issuers were the main reason why the checks were rejected.
Banks processed more than 466,000 cashier checks worth 1,989 trillion rials ($7.1 billion), indicating 12.1% and 31.4% monthly rise in volume and value, respectively.
More than 150,000 checks worth 1,419 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 those circulating within branches of one bank.