Simplified Postdated Check (IOU) Data in Turkey

Originaly it's there:

https://www.riskmerkezi.org/en/Content/Upload/istatistikiraporlar/ekler/3602/Information_about_Returned_Checks_Out_of_Presented_Checks_to_Banks__-_December_2023.pdf

Checks are in Turkey are used as carrier of this IOU system. Apart from checks in other countries in Turkey issuer puts a date to a check so they suddenly get credit form. Also they are bearer assets, transfereble througout a supply chain. Before the payment due date money transfer at a bank cannot be trigerred by final holder.

Let's only focus last year, 2023:

1. Presented Checks to Banks:

In the document it is explained in the footnote as:

Displays the total number, amount and the unique number of drawers of presented checks by the date of submission.

We also use issuer term for drawer. When a holder submits a check to bank at payment due time wire transfer gets triggered.

  • Number of checks presented: 6.954.515
  • Unique number of issuers: 558.651
  • Amount: 4.566.879.000.000 TL (Turkish Lira)

With very sketchy math: USD/TL was ~18 at 01.01.23 and ~30 at 01.01.24. I'm going to take the avarage as 26. Total face value should make around 175 billion USD. But we cannot know the total volume of this asset makes since it's bearer asset and unfortunately number of holders are not recorded. If we assume that each IOU only used twice (one for issue and one for another transaction), then it should make 30% percent of the GDP of Turkey which was 1.154 trillion USD in 2023

2. Returned Checks

It the document it is explained in the footnote as:

Displays the total number, amount and the unique number of drawers of returned checks by the date of submission.

It means that issuer of the IOU has insufficient balance at the payment due date. It should simply mean default of IOUs.

  • Number of checks: 146.770
    • Rate: 0.9
  • Unique number of issuers: 16.078
    • Rate: 2.9
  • Amount: 57.034.000.000 TL
    • Rate: 1.2

There is also other section Returned Checks Paid it is roughly 20% of defaults. I will skip it for simlicity. Note that there is such communication channel through banks between creditor and holder in the case of failure.

Select a repo