Banks to clear cheques within few hours starting October 4: RBI

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.

The RBI stated that cheques received by drawee banks between 10 am and 11 am must be confirmed, either positively or negatively, by 2 pm. Cheques without confirmation from the drawee bank by 2 pm will be considered approved and included for settlement at 2 pm.

“The presenting bank will process the payment and release it to customers immediately, but no later than 1 hour after successful settlement, subject to usual safeguards,” the circular said.

The RBI has instructed banks to inform customers about changes in the cheque clearing process.