RBI to Implement Same-Day Cheque Clearance System Starting October 4, Enhancing Banking Efficiency

The Reserve Bank of India (RBI) is set to implement a new system for cheque clearance starting October 4, 2025. This initiative aims to significantly reduce the current processing time from up to two working days to just a few hours. Cheques will be scanned and processed continuously during business hours, enhancing efficiency and customer experience.

To achieve this, the RBI will transition the Cheque Truncation System (CTS) from batch processing to a continuous clearing model. This change will occur in two phases, with Phase 1 beginning on October 4, 2025, and Phase 2 on January 3, 2026. The RBI has issued a circular detailing these changes and their implementation timeline.

Continuous Clearing and Settlement

Under the new system, banks will have a single presentation session from 10:00 AM to 4:00 PM. During this period, cheques received by branches must be scanned and sent to the clearing house immediately. The drawee bank is required to provide either positive or negative confirmation for each cheque presented.

In Phase 1, which runs from October 4, 2025, to January 2, 2026, drawee banks must confirm cheques by the end of the confirmation session at 7:00 PM. If no confirmation is provided by this time, cheques will be considered approved for settlement. This phase aims to streamline the process and reduce settlement risks.

Phase 2 Implementation

Phase 2 begins on January 3, 2026, introducing a T+3 clear hours expiry time for cheques. For example, cheques received between 10:00 AM and 11:00 AM must be confirmed by the drawee bank by 2:00 PM. If no confirmation is given within these three hours, they will be deemed approved for settlement at that time.

Upon completion of settlement, the clearing house will inform presenting banks of positive and negative confirmations. Presenting banks are then required to process this information and release payments to customers within one hour of successful settlement, ensuring usual safeguards are in place.

Customer Awareness and Bank Readiness

The RBI has instructed banks to inform customers about these changes in the cheque clearing process. Additionally, banks must prepare to participate in continuous clearing in CTS on the specified dates. This preparation is crucial for a smooth transition and effective implementation of the new system.

This new mechanism is expected to enhance the overall efficiency of cheque processing while reducing risks associated with settlements. By moving towards continuous clearing and real-time settlement, the RBI aims to improve customer satisfaction and streamline banking operations across India.

With inputs from PTI