Decline in Bad Checks

EghtesadOnline: About 5.4 million checks worth an estimated 541 trillion rials ($3.82 billion) were transacted in the first month (March 21-April 21) of the current fiscal, of which almost 525,000 were bad checks worth 58 trillion rials ($409.8 million).

News ID: ۷۴۷۴۵۶

29 May 2019

Among all the checks exchanged during the month, about 10.8% were returned by the banks.

According to a report published in the Central Bank of Iran website, the bounced checks were 21.7% less in value and down 40.1% in volume compared to the previous month.

Data indicates that the total number and value of transacted checks were down 29.4% and 47.5% respectively compared to a month ago, Financial Tribune reported.

Over 96% of the checks were returned by banks due to insufficient funds and a shortfall in bank accounts.

According to statistics, more than 1.7 million checks worth 264 trillion rials ($1.86 billion) changed hands during the period in Tehran Province. A total of 165,000 checks worth 27 trillion rials ($190.8 million) bounced in the capital alone, which constituted 47% of all bad checks in  in terms of number.

During the period Kerman topped the list of provinces with the highest ratio of bounced checks' value to the total of checks issued at 14.7%.

Accordingly, Ilam Province recorded the lowest ratio of value of bounced checks to the total value of checks transacted at 4%.

Decline in the value of bad checks during the one-month period shows that reforms to regulations related to bad checks are producing the desired results.

As stated by the CBI, the changes allow check holders to withdraw money from all check accounts in any bank if there was a short fall in the account of the issuer of the check.

The Majlis approved the outline of reforms to the check system in August 2018. Amendments call for tightening rules for opening a bank account to receive a check book, imposing credit restrictions on check book holders and developing a public database on the status of checks.