Incidence of bounced checks declines

The value of bounced checks has steadily dropped in the past four years to SR 3.8 billion by the end of 2012 compared to SR 15 billion in 2009, according to a Saudi Credit Bureau (SIMAH) report.
On a yearly basis, the number of bounced checks fell by 27 percent by the end of 2012 compared to the 2011 figures to reach 44,984 cases, according to the SIMAH report.
The value of bounced checks also fell by 31 percent in 2012, from SR 5 billion in 2011.
The number of bounced checks that individuals issued increased by 2 percent to hit 22,795 at the end of 2012. However, their value dropped by 29 percent to SR 1.3 billion compared to SR 1.8 billion in 2011, the report said.
The value of corporate bounced checks dropped by 32 percent to reach SR 2.5 billion compared to SR 3.7 billion at the end of 2011. Their number also dropped by 44 percent at 22,189 compared to 39,660 in 2011.
The first quarter of 2012 witnessed the highest rate of decline in the value of bounced checks for corporations to reach SR 720 million compared to SR 1.8 billion in the first quarter of 2011, a decrease of 60 percent.
The second quarter of 2012 saw the highest rate of decline of bounced checks for individuals to reach SR 266 million compared to SR 568 million in the second quarter of 2011, a decrease of 53 percent, the report said.
During the last four years, the value and number of bounced checks witnessed a drastic drop at rates of 60 percent and 63 percent respectively. The value of bounced checks dropped to SR 3.8 billion in the end of 2012 compared to SR 15 billion in 2009 and, likewise, the number of bounced checks dropped to 44,984 from 167,155 checks in 2012 and 2009 respectively, the report said.
According to the report, 63 percent of the bounced checks at the end of last year were attributed to non-availability of sufficient balance. Corporations and individuals issued some 14,600 and 17,000 bounced checks respectively during the last year for this reason. The value of these checks stood at SR 1.6 billion and SR 767 million respectively, the report said.
CEO of SIMAH Nabil Al-Mubarak said the drastic drop in the number and value of bounced checks has demonstrated keenness of the concerned parties to eradicate this phenomenon and bring back integrity and respect to checks as legal and payable papers.
SIMAH, which is owned by 10 Saudi banks and governed by the Credit Information System (CIS), has recently launched a series of awareness campaigns on the dangers and risks associated with bounced checks due to their negative effects on individuals or community.