Total value of the rejected checks was 255 trillion rials ($910 million) 16.3% less on a monthly basis.
The Central Bank of Iran said bad checks declined 39.1% in volume compared with the corresponding month last year while their value increased 9.5%.
Bounced checks accounted for 8.3% of the total number of checks and 9.9% of the value of checks drawn during the period.
In the reviewed period, about 148,000 checks worth 109 trillion rials ($389m) were rejected in Tehran Province, accounting for 7.3% and 8.2% of volume and value of drawn checks, respectively, in the capital.
The ratio of bad checks to transacted checks in Kohgilouyeh-Boyerahmad Province was 14.6%, the highest among all provinces. Lorestan Province was next at 12.6%.
North Khorasan Province was third with the highest ratio of bad checks to transacted checks at 12.2%. 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 were rejected.
Drawn Checks
According to the CBI, the total number of checks dropped 7.5% to reach 6.5 million during the month. Total check transactions reached 2,583 trillion rials ($9.2 billion) indicating 3.1% monthly rise.
More than 2 million checks worth 1,318 trillion rials ($4.7 billion) changed hands in Tehran Province. The sprawling metropolis accounted for 30.9% and 51.1% of all drawn checks across the country in volume and value, respectively.
Isfahan Province was next with 10.7% of all drawn checks and 6.7% of the value of checks issued in the month.
The number of transacted checks dropped 31% compared with the corresponding month last year while in value terms the transactions soared 38.9%.
Data excludes checks circulating within branches of a single bank and covers only interbank checks processed by Chekavak, a CBI-affiliated electronic check processing system.
More than 458,000 cashier checks worth 1,903 trillion rials ($6.8b) were cleared by the banks, down 1.9% and 4.3% in volume and value, respectively.
More than 150,000 checks worth 1,304 trillion rials ($4.6 billion) 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 payment.