1bn RON worth of bounced cheques and promissory notes

The sums on bounced debt instruments, an indicator gauging cash problems companies are coping with, in March climbed to more than 1bn RON (252m euros), the second time in recent years when this threshold has been exceeded, according to NBR data. Since last October, when the value of payment incidents went beyond 1bn RON, sums involved in the instruments bounced had dropped to half in January and to 720m RON in February. A payment refusal means that a firm going to the bank to cash in its check or promissory note on the basis of which it delivered commodities to its clients is unable to collect its money as the respective client does not have any funds in its account. If a promissory note or a check is not cashed in, the situation can be settled either amicably or in court, with the latter case likely to end in insolvency, says Valeria Tomescu, vice-president with Creditreform, a provider of reports on company creditworthiness. The number of payment refusal cases reached 34,000 in March, up from the first months of the year, but down from the all-time peaks of over 40,000 registered since November 2008.