Central Bank Claims Reduction in Returned Checks; Judiciary: Cases Have Increased

While the Central Bank of the Islamic Republic claims that the new check law has reduced returned checks from 20% to 7%, the Judiciary has announced that the law has increased the number of legal cases. According to Iranian media, Mehran Mohramian, the Deputy for New Technologies at the Central Bank, stated that prior to the implementation of the new check law, returned checks constituted 20% of all issued checks, and this ratio has now decreased to 7%. This official from the Central Bank claimed that before the new law was enacted, 10 people were sent to prison daily for issuing 'bad checks,' whereas now only one person goes to prison every three days for this reason. However, the head of the General and Revolutionary Courts of Tehran has stated that this law has not significantly impacted the Iranian judicial system according to the legislator's goals and has not led to a decrease in public visits to courts or a reduction in the formation of legal cases. Rabieollah Ghorbani emphasized that the law has led to the creation of new lawsuits in the judicial system and has increased the rate of litigation, disrupting some procedural rules. Returned checks have been one of the challenges in the Iranian economy, primarily stemming from a significant portion of debtors' inability to repay their debts, influenced by government economic policies. The acceleration of inflation, alongside a decrease in people's purchasing power and rising operational costs for businesses, has disrupted the economic equations of business owners, trapping them in a debt trap due to reduced liquidity. For example, one restaurant brand owner in Iran mentioned in May of this year that restaurants were closing due to reduced purchasing power, emphasizing that 55% of Tehran's restaurants have unintentionally moved towards bankruptcy. This is just one example of ongoing events beneath the surface of the Iranian economy, and a review of published news indicates that a significant portion of production capacity in the poultry and livestock sectors has either decreased or been removed from production. Additionally, a considerable number of businesses, such as supermarket owners, have sought to change their business models. Analysts believe that the Iranian economy is on the brink of collapse, influenced by executed economic programs and foreign policy, with signs of this collapse reflected in the living conditions of the people and the state of businesses.