The Central Bank’s New Technologies Vice-Chancellor hopes that digital checks will replace physical checks in the next 3 years and that the check ecosystem in Iran will be completely digitally developed. However, the dream of eliminating paper checks will probably be out of reach of the country’s banking system by the end of 1405 despite the technical and operational obstacles. Especially when the old checks are still circulating in the banking system with the popularity of the Sayyadi’s check.
According to Iran digital economy annotation, since the first digital check was issued on Aban 21, 1400, according to Mehran Moharamian, Vice President of New Technologies of the Central Bank, to IBNA news agency: 450,000 digital checkbooks have been provided to customers by 12 banks. Moharamian hopes that within the next 3 years, with the elimination of paper checks, the check ecosystem in Iran will be dominated by digital checks.
In fact, the Central Bank’s Vice President of New Technologies has hope for a dream that was held in the Central Bank’s previous vice presidents since 91, a dream that until 97 was only vague speculation about the possibility of realizing an electronic check. With the approval of the check law in 97, the realization of digital check as an income law and the path of learning digital check became clear. In other words, the road map for the implementation and development of digital check was placed in the field of law in 97, and the central bank unveiled the first digital check sheet in 1400 by preparing the technical and operational background.
Check credit return?
At that time, Ali Salehabadi, the former head of the Central Bank, said at the unveiling ceremony of the digital check: “One of the most important goals of the Central Bank is to restore the validity of the check to the check itself.” This statement of Salehabadi was expressed at a time when the number of returned checks was still high despite the creation of a Sayyadi’s check. In fact, the digital check had a control purpose rather than being a platform for the learning of checks among the society: digital control of check circulation in the economy. At the present moment, digital check has distanced itself from technical complications and legal dead ends and has been operationalized in nearly half of the country’s banks.
In fact, the Checkad system, or digital secure check, was an end to the technical and executive problems of the digital check plan, and with its launch, the field of money movement in the digital platform was provided. The checkad system is emphasized as a task in Article 1 of the Check Issuance Amendment Law, and it is currently the center for the Samat, Sayyad, Mahcheck and Chekavak systems, and it has also completed the process of connecting banks to the check ecosystem.
It is likely that the process of learning digital checks will be effective in the reduction of liquidity in the country, and in the future we will see a decrease in cash and bills in the hands of natural and legal persons in relation to liquidity. The process that started with the development of the payment network and operation of the central bank in bank payment channels has been followed as a macro policy in these years.
Island acceptance of digital check
Moharamian believes that despite the fact that digital checks are active in 12 banks of the country, the necessary cultural development in this field has not yet taken place. He states: Currently, 12 banks are active in the field of electronic checks and give electronic checks to their customers. All 30 banks accept electronic checks from other banks. Although the necessary culture for this has not yet been done and an employee may not have enough knowledge about this in a bank branch, but the technical infrastructure is completely ready for banks to accept electronic checks from other banks.
In fact, the acceptance of electronic or digital checks by banks can create a complete ecosystem for digital checks and be the growth point of this money liquidity tool. With this in mind, if the 30 banks operating in the country reach a general agreement on this matter, removing physical checks from the country’s check ecosystem is not far from imagination. The Vice President of New Technologies of the Central Bank says: We have a plan for the electronic check of one bank to be cashed in the electronic devices of other banks, because currently it can only be cashed in the electronic devices of the same bank. The feature of an electronic check is that it is no longer necessary to visit the branch in person to cash it, but now this happens in the same bank’s electronic tools.
Based on this, the country’s banks still do not have the ability to cash digital checks on electronic devices in an integrated way, and they should develop the infrastructure of their electronic devices in this field so that they can cash the digital checks of other banks on their electronic devices. Moharamian says in this regard: Banks are gradually implementing this measure so that the electronic check of one bank can be cashed in the electronic devices of other banks. Technical issues are provided by the central bank and only discussions related to development should be done in the bank in question.
What do the statistics say?
In Dey 1402, according to the statistics of the Central Bank, 8.1 million check denominations with a value of 5539 thousand billion Rials were in circulation in the whole country, which is an increase of 2.4% and 5.4%, respectively, in terms of the number and amount compared to the previous month. had. Based on this, 7.4 million checks have been collected in the whole country and 685 thousand have been returned.
The Vice President of New Technologies of the Central Bank has stated: So far, nearly 450,000 digital checkbooks have been issued, which is a good statistic. In the meantime, about 224,000 digital checks have been issued and presented by people, and of this number, about 194,000 have been cashed. That is, it has been cashed in branches using digital tools and in absentia, which shows that it is gradually finding its place among people, and we hope that with the removal of the physical check, which will be within the next three years, the entire market will be transferred to a digital check.
Moharamian considered the last step in the implementation of the electronic check project to be the creation of a credit limit and said: By creating a credit limit for checks, the last step for the implementation of the electronic check project will be taken, and if it is implemented, the statistics of check fraud, bounced checks and bounced check prisoners will decrease even more.
It seems that despite the statistics of collecting more than 8 million paper checks in Dey, along with the collection of 194 thousand digital checks so far, replacing digital checks with paper checks within the next 3 years is out of reach. However, it should be seen in the future with what kind of incentive policies the Central Bank will advance the path of this alternative.
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