Union of Chambers and Commodity Exchanges of Turkey

Hisarcıklıoğlu reported that, according to research by the Anadolu Agency, during the 9 month period of this year the number of dishonored checks has increased by 49% in comparison to the same period of the previous year, increasing from 2.6% to 4.3%.

TOBB President Hisarcıklıoğlu pointed out that there is also an significant increase in the number of court prohibited checks; 48,000 for last year while 338,000 in the first 9 months of this year alone. Stating that this increase is also affected by the increased speed with which the prohibitions are ordered for the givers of dishonored checks, Hisarcıklıoğlu went on to say:

“There are two reasons for the rapid increase in the number of dishonored checks in 2012. The first, no new control mechanism has been established after removing prison sentences from cases of dishonored checks. The expectations of the real sector was that once the Credit Registration Bureau (KKB) was established, entrepreneurs considering accepting checks would be able to access the check giver’s record of past checks honored. This would enable them to make their decisions aware of the possible risks involved. The information regarding positive or negative payment performance of clients is being shared between banks since the implementation of the system back in April. This is a good development however; the system is completely closed off to the real sector. The second reason for the increase in dishonored checks is the lull in the markets in regards to the growth figures in the first half of this year. Domestic consumption during the first half of the year has decreased by 0.2% in comparison to the same period last year. Similarly, the machinery and equipment investments of the private sector have decreased by 5.9% in the real sense.”

Hisarcıklıoğlu emphasized that, as a result, there is a need for a new control mechanism in the check system and that checks fulfill an important role in the workings of the economy; the removal of a prison sentences for dishonored checks has not been replace with a mechanism to increase the trust in the check system.

- “The reputation of the check has suffered”

Stating that, as a result, the reputation of the check has suffered, Hisarcıklıoğlu said, “Now there is no distinction between high and low risk. Everyone is suspicious of each other. The use of credit cards in the market is increasing in place of the check. However, these are not interchangeable. Let alone having the cards take on the burden carried by checks. We are receiving mail and calls from Anatolia in regards to the problems caused by checks every day.”

M. Rifat Hisarcıklıoğlu reported that bureaucrats have stated that the figures regarding checks have not reached a critical point yet and that they are following the developments for the moment and went on, “But they are forgetting one thing. Expectation and perception are very important for the economy. Never mind the fact that the figures are there for all to see. The ratio of dishonored checks has reached its highest level in the last three years.”

Stating that if trust is not reestablished in checks the gears of commerce will be difficult to turn and that trust in checks will decrease market-wide and economic activity will be negatively impacted by this; Hisarcıklıoğlu said that the decrease in check usage since the second half of 2012 is noteworthy.

Hisarcıklıoğlu reported that when compared with 2011, the amount in checks relayed to the Inter-Bank Exchange Chambers increased by 5% in the first quarter of 2012, decreased by 3% in the second quarter and continued to decrease by another 2% in the third quarter.

- “If trust in checks isn’t reestablished the growth rate of the economy will slow”

Stating that, “The reputation of the check needs to be restored,” Hisarcıklıoğlu reminded that they issued a call to the ministers and the Banking Union in the past, requesting a system where traders could query each others’ credit/check record.

Hisarcıklıoğlu said:

“For instance, a system wherein the information of the person drawing the check would be sent to the person receiving the check with the authorization of the drawee. Such a system would reestablish trust in checks. The person receiving the check would know the risk they were putting themselves in make their decisions accordingly. This way, trust in checks would increase. The increase in dishonored checks is the result of the stagnation in the domestic market and the loss of the check’s reputation. This did not happen. The Banking Union decided to establish its own system. The system retains significant amount of bureaucracy and results take time. However, commerce requires fast reactions. You have to be able to learn the check record of the opposite party on the same day, in the same hour. The system we suggested would work over SMS and enable the necessary speed.”

Stating that unless trust in the check system is reestablished, the problems stemming from check usage would only increase and continue to slow down commerce and economic growth more than is expected, Hisarcıklıoğlu reported that the check history record system suggested by TOBB needs to be brought into effect as soon as possible so that persons engaging in trade in checks can gauge the risk they take on, protecting honest entrepreneurs from harm.