Bounced Checks on the Rise

EghtesadOnline: Bounced checks registered a monthly increase of 6.4% up until the sixth calendar month to September 22, the Central Bank of Iran reported.

News ID: ۷۴۸۸۰۳

26 October 2019

Lenders processed more than 688,000 checks worth 108 trillion rials ($960 million) in the month, which indicates a decline of 0.3% in value compared to a month earlier when 647,000 checks worth 108.396 trillion rials ($963.52 million) were returned.

The figures exclude circulated within branches of a single bank and covers only interbank checks processed by Chekavak, a CBI-affiliated electronic check processing system.

A total of 7.5 million checks were issued in the mentioned period, showing a 2.7% increase in volume compared to the month before, according to Financial Tribune.

The value of drawn checks stood at 834 trillion rials ($7.4 billion), indicating a monthly decline of 3.7% in value.

Bounced checks accounted for 9.2% in volume and 13% in value of the total transacted checks in the said period.

Bad checks drawn in Tehran alone contributed to 29.6% and 44.8% of all bounced checks in terms of volume and value, respectively.

More than 203,000 checks valued at 48 trillion rials ($426.6 million) were found to be worthless in the capital in the period.

Kohgilouyeh-Boyerahmad Province ranked first as the province with the highest ratio of bounced checks to transacted checks at 15.2%. Chaharmahal-Bakhtiari Province was next at 13.1% and Kerman Province at 12.7%.

At the bottom of the list were Gilan at 6.8%, Alborz at 8% and Khorasan Razavi and Yazd jointly at 8.3%.

Insufficient funds in accounts was the main reason for the rejection of more than 662,000 checks valued at 103 trillion rials ($915.55 million).

About 8.4% of all transacted checks and 11.4% of the total value of drawn checks in the capital were returned.

Of all checks drawn in the month, 2.4 million valued at 427 trillion rials ($3.8 billion) were in Tehran.

Banks cleared about 6.8 million drawn checks worth 726 trillion rials ($6.45 billion) during the aforementioned period.

Cleared checks registered a 2.4% increase in volume and a 4.2% decline in value, compared to the previous month when 6.6 million checks worth  757 trillion rials ($6.72 billion) were cleared.

The number of cleared checks in the capital stood at 2.2 million with a total value of 378 trillion rials ($3.36 billion).

Cleared checks in Tehran Province accounted for 91.6% of the total volume and 88.6% of the total value of checks issued in the sprawling capital.