Issuance of Bearer Checks Snowballed Last Year

Domestic banks issued more than 1 billion bearer checks last year, a record, which analysts said boosts the argument that bills of higher denominations should be issued.

The Bank of Korea said Sunday that domestic banks issued 2.39 trillion won ($1.84 billion) of bank checks last year. The checks are issued in denominations of 100,000 won, 300,000 won, 500,000 won and 1 million won. A total of 850 million of the 100,000 won checks were issued last year, 84 percent of the all checks issued and 36 percent of the total check value. The total check count comes out to an average of 21 per Korean.

Proponents of higher-denominated bills like to point out that it costs banks an average of 259 won to issue a check, store and settle the payments. Last year, domestic banks spent a total of 221.1 billion won to handle the checks, boosting the argument to issue notes in 50,000 won and 100,000 won denominations. The highest denominated bill, the 10,000 won note that was first issued in 1973, has failed to keep up with price increases.

Nonetheless, the central bank has no plans to issue notes in bigger denominations despite the apparent need. The bank has countered the argument by saying the change could increase monetary abuses and corruption, such as bribery.

by Choi Hyeon-chul