Bad Checks Jump
EghtesadOnline: Central Bank of Iran data show a sharp increase in bad checks in the month to January 20 while there was no significant change in overall check transactions.
Total value of checks returned during the month jumped 19.6% on the month before to reach 305 trillion rials ($1.13 billion).
By the end of the period, the number of rejected checks was 553,000 up 1.6% in one month, data published on the CBI website said.
In terms of volume and value, bad checks on the month accounted for 8.4% and 11.3% of all drawn checks, respectively.
It merits mention that during the corresponding period last year 8% and 11.1% of the volume and value of all drawn checks were rejected.
In the reviewed period, about 157,000 checks worth 135 trillion rials ($500 million) bounced in the capital alone, accounting for 7.6% and 9.8% of volume and value of drawn checks in the sprawling metropolis.
In terms of numbers, Kohgilouyeh-Boyerahmad Province topped the list with the highest ratio of bad checks to transacted checks at 14.6%.
Lorestan Province was next with 12.7% and North Khorasan Province third at 12.3%. Provinces with the lowest ratio were Gilan 6.2%, Alborz 7.5% and Yazd 7.8%.
Insufficient funds in the accounts of issuers were the main reason why the checks failed. During the period more than 534,000 checks worth 270 trillion rials bounced because of NSFs.
More than 6.5 million checks worth 2,697 trillion rials ($9.98 billion) were drawn in the 30 days. The number rose 0.2% and the value was up 4.4% on the month before.
Of all the drawn checks in the month, 2.1 million checks valued at 1,384 trillion rials ($5.12 billion) were issued in Tehran Province.
Tehran ranked first with the highest volume and value of drawn checks, accounting for 31.6% and 51.3% of all drawn checks, respectively.
Isfahan Province was second in volume and value, representing 10.7% of all drawn checks and 7.1% of the value of checks issued in the month.
Around 455,000 cashier checks worth 2,916 trillion rials were cleared by banks indicating 0.6% decline in volume and 53.2% rise in value.
More than 153,000 checks worth 2,316 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 circulated within the branches of a single bank.