More bad checks not due to new regulation

More bad checks not due to new regulation

ANKARA - Hürriyet Daily News
More bad checks not due to new regulation

AKP vice president Gedik says that the increasing number of bad checks is due to economic growth not new law. AA photo

The increasing trend in the number of bouncing checks is based on economic growth performance, not a recent change in the law that lifted the previous prison sentence for the offence, Bülent Gedikli, vice president of the ruling Justice and Development Party (AKP).

The new check law went into effect on Feb. 3. Bank checks are widely used in Turkey, particularly among small- and medium-sized enterprises, as a short- and mid-range payment tool. Businessmen in the textile sector have been especially vocal about their concerns regarding the new law since it went into effect.

There is a general mistrust in the market, and people have begun doing business within shorter timeframes of about two months, the president of the General Secretariat of the Istanbul Textile and Apparel Exporters’ Association, Hikmet Tanrıverdi, also told Radikal March 16.

There are many gaps in the new law that need filling, said Fikri Kurt, president of the Association of Knitting Industrialists (ÖRSAD).

Gedikli, however, disagrees with critics of the check law, saying that an annual comparison of the number of bad checks does not reflect the whole picture.

“The number of bad checks decreases in periods when the economy grows. The figure increases when the economy slows or contracts,” he said Sept. 14, according to Anatolia news agency.

The number of bounced checks was 658,000 in the first eight months of 2007, and in the same period in 2008 the figure was 642,000, Gedikli said. The figure exceeded 1 million in the same period of 2009, when the economy contracted due to the global financial crisis, he said. The figures for the same periods of 2010 and 2011, when the Turkish economy was recording very good growth performance, were 470,000 and 262,000 respectively. The figure was 498,000 for the first eight months of this year.