MUMBAI: The Reserve Bank of India (RBI) has announced that bank cheques must be cleared within a few hours from October 4 -- down from the current clearance time of up to two working days.
Under the new mechanism, the banks will scan, present and pass cheques within a few hours and on a continuous basis during the business hours, cutting the clearing cycle down from the present T+1 days, a circular from central bank said.
The current Cheque Truncation System (CTS) processes cheques within a clearing cycle of up to two working days.
The RBI decided to transition CTS from batch processing to continuous clearing with 'on-realisation-settlement' to improve the efficiency of cheque clearing, reduce settlement risk for participants, and enhance customer experience.
CTS will transition to continuous clearing and settlement on realisation in two phases. Phase 1 will be implemented on October 4, 2025, and Phase 2 on January 3, 2026. A single presentation session is scheduled from 10 am to 4 pm.
"Cheques received by the branches shall be scanned and sent to the clearing house by the banks immediately and continuously during the presentation session, " the circular said.
"The clearing house will, in turn, release the cheque images to drawee banks on a continuous basis. The confirmation session shall start at 10 am and close at 7 pm. For every cheque presented, the drawee bank shall generate either positive confirmation (for honoured cheques) or negative confirmation (for dishonoured cheques), " it further said.
In Phase 1, from October 4, 2025, to January 2, 2026, drawee banks must confirm cheques presented to them by 7 pm. If not confirmed, the cheques will be considered approved for settlement.
Starting January 3, 2026, the expiry time for cheques will be updated to T+3 clear hours in Phase 2.