Are Banks Ready to Clear Cheques Within Hours Starting October 4?
Click to start listening
Synopsis
In a groundbreaking move, the Reserve Bank of India (RBI) has announced that bank cheques will be cleared within hours starting October 4, drastically reducing the current wait time. This change aims to enhance customer experience and improve efficiency in cheque processing.
Key Takeaways
- Cheques will be cleared within hours starting October 4.
- The current wait time of up to two days will be eliminated.
- Continuous processing during business hours will enhance efficiency.
- Confirmation of cheques will be required by 7 pm in Phase 1.
- Cheques without confirmation by 2 pm will be approved for settlement.
Mumbai, Aug 14 (NationPress) The Reserve Bank of India (RBI) has declared that bank cheques will be cleared within mere hours starting from October 4, significantly reducing the current clearance timeframe of up to two working days.
With this new system, banks will continuously scan, present, and process cheques throughout business hours, effectively shortening the clearing cycle from the existing T+1 days, as noted in a recent circular from the central bank.
The present Cheque Truncation System (CTS) operates with a clearing cycle lasting up to two working days.
The RBI's decision to shift the CTS from batch processing to continuous clearing with 'on-realisation-settlement' aims to boost cheque clearing efficiency, mitigate settlement risks for participants, and enhance the overall customer experience.
The transition to continuous clearing and realisation settlement will occur in two stages. Phase 1 is set to begin on October 4, 2025, followed by Phase 2 on January 3, 2026. A singular presentation session will be held from 10 am to 4 pm.
As per the circular, cheques received by bank branches will be scanned and forwarded to the clearing house by the banks promptly and consistently during the presentation sessions.
The clearing house will then continuously release cheque images to drawee banks. The confirmation session will commence at 10 am and conclude at 7 pm. For each cheque presented, the drawee bank will issue either a positive confirmation (for honoured cheques) or a negative confirmation (for dishonoured cheques).
During Phase 1, from October 4, 2025, to January 2, 2026, drawee banks are required to confirm cheques presented by 7 pm. If not confirmed, the cheques will automatically be regarded as approved for settlement.
As of January 3, 2026, the expiration time for cheques will adjust to T+3 clearance hours in Phase 2.
The RBI has stipulated that cheques received by drawee banks between 10 am and 11 am must be confirmed, whether positively or negatively, by 2 pm. Any cheque lacking confirmation from the drawee bank by 2 pm will be deemed approved and included for settlement at that time.
The presenting bank will ensure prompt processing of payments to customers, releasing funds immediately but no later than 1 hour after successful settlement, subject to standard safeguards, as mentioned in the circular.
The RBI has mandated that banks communicate these changes in the cheque clearing process to their customers.
Point of View
The RBI's initiative to expedite the cheque clearing process is a commendable step towards modernizing banking in India. By reducing the waiting time from days to hours, the RBI is not only enhancing customer satisfaction but also increasing operational efficiency in the banking sector. This transition aligns with global standards and reflects the RBI's commitment to improving financial services for all.
NationPress
08/10/2025
Frequently Asked Questions
When will the new cheque clearing system start?
The new cheque clearing system will start on October 4, 2025.
How long will it take for cheques to clear under the new system?
Cheques will be cleared within a few hours under the new system.
What is the purpose of this new cheque clearing process?
The purpose is to enhance efficiency, reduce settlement risks, and improve customer experience.
What happens if a cheque is not confirmed by 2 pm?
If a cheque is not confirmed by 2 pm, it will be considered approved for settlement.
Will banks inform customers about these changes?
Yes, the RBI has instructed banks to inform customers about the changes in the cheque clearing process.
