The Central Bank of Iran has decided to ban the issuance of secured checks starting from October 7, 2026. This action is part of a broader strategy to completely eliminate secured checks from the banking network and replace them with guaranteed checks. Acceptance of secured checks will also be halted from January 1, 2027.
Secured Checks and Their Challenges
Secured checks were commonly used as a tool for transferring funds in large transactions in the past. However, this tool faced serious limitations. One of the biggest problems with secured checks was the lack of inquiry capability for the check holder. This led to information asymmetry between the parties involved in the transaction and created opportunities for financial abuses.
Additionally, the incorrect registration of the issuer's details allowed some individuals to use this tool for fraud and tax evasion. Furthermore, recipients of secured checks were required to visit the branch of the same bank in the same province, significantly reducing the efficiency of this tool.
Advantages of Guaranteed Checks
Guaranteed checks, as a replacement for secured checks, have multiple advantages. One of these advantages is the removal of geographical limitations. With guaranteed checks, there is no need to visit the branch of the same bank in one province, making it easier to use. Moreover, these types of checks have the capability for inquiry through the Seeyad ID, allowing the holder to verify the check's validity before receiving it.
Guaranteed checks are registered through the Seeyad system and are subject to the new check law. This feature provides greater security for the holder and allows for more effective monitoring by regulatory bodies. Additionally, by connecting this type of check to regulatory systems, the likelihood of misuse for criminal activities is significantly reduced.
The Central Bank has announced that as part of these changes, starting from October 7, 2026, the issuance of secured checks will be prohibited, and banks will be required to issue guaranteed checks. In the second phase, starting from January 1, the transfer of secured checks will also be banned, and this type of check will be completely removed from the banking services cycle.
With these changes, the Central Bank emphasizes that the payment of guaranteed checks will be carried out immediately and in accordance with the payment process of secured checks to ensure that customer operations are not disrupted. These measures are considered steps towards enhancing transparency and aligning the payment system with modern regulatory standards.
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