Bad Checks Pile Up in Iran

EghtesadOnline: Local banks saw a significant rise in the volume of bounced checks during the last calendar month ending July 22, according to the latest reports published on the Central Bank of Iran website.

News ID: ۷۴۸۲۰۸

18 August 2019

Out of the total checks issued during the month, 717,400 checks valued 112 trillion rials ($957 million) bounced – up 16.3% and 19.2% in volume and value, respectively, compared with a month earlier when banks returned 617,000 bad checks worth 94 trillion rials ($803 million).

About 7.8 million checks worth 1,006 trillion rials ($8.6 billion) were drawn in the month, registering 18.5% increase in number and 19.5% rise in value compared to a month earlier.

The data covered only interbank checks processed by Chekavak, a CBI affiliate electronic check processing system, according to Financial Tribune.

Bounced checks accounted for 9.3% of the total checks in volume and 11.1% in value in the month.

A total of 223,000 checks worth 56 trillion rials ($478.6 million) bounced in the capital alone, which constituted 31% and 49.9% of all bounced checks, respectively, in terms of volume and value.

Almost 8.4% of all transacted checks and 10.6% of the total value of checks in the capital were returned.

About 2.7 million checks worth 526 trillion rials ($4.5 billion) changed hands during the month in Tehran Province.

Kurdistan Province had the highest ratio of bounced checks to transacted checks. Of all drawn checks, 17.1% bounced in the western province.

This was followed by Sistan and Baluchestan Province at 15% and Semnan and Qom provinces jointly each at 14.7%.

Kohgiluyeh and Boyer-Ahmad had the lowest ratio of bounced checks, with 5.7% of the total bad checks.

About 688,000 checks worth 104 trillion rials ($888 million) bounced due to insufficient funds in accounts of issuers.

Cleared Checks

More than 7 million checks worth 894 trillion rials ($7.2 billion) were cleared by banks during the month under review, showing an 18.7% and 19.5% increase in the volume and value of checks, respectively, compared to the previous month.

The figure accounted for 90.7% of the total number and 88.9% of the total value of checks.

In the same month, 2.4 million checks worth 470 trillion rials ($4 billion) were cashed in Tehran Province, accounting for 91.6% of the total volume and 89.4% of total value of checks transacted in the capital, which  is home to the head offices of all major businesses in the country of 80 million people.