The Reserve Bank of India (RBI) has announced that starting October 4, bank cheques will be cleared within a few hours, significantly reducing the current processing time of up to two working days.
According to an RBI circular, the move will see banks shift from the existing batch-based Cheque Truncation System (CTS) to continuous clearing with “on-realisation-settlement” during business hours. The change aims to boost efficiency, reduce settlement risks, and improve customer experience.
Under the new system, banks will scan and present cheques immediately and on a continuous basis between 10 a.m. and 4 p.m., instead of waiting for batch clearance. The clearing house will release cheque images to drawee banks in real time. Drawee banks will then have to confirm positively for honoured cheques or negatively for dishonoured ones, between 10 a.m. and 7 p.m. each day.
The transition will occur in two phases. In Phase 1, from October 4, 2025, to January 2, 2026, drawee banks must confirm cheques by 7 p.m. daily, failing which they will be deemed approved for settlement.
Phase 2, beginning January 3, 2026, will further tighten timelines. Cheques received between 10 a.m. and 11 a.m. will need confirmation by 2 p.m. the same day. Any cheque not confirmed by the deadline will be considered approved and included in the 2 p.m. settlement. The presenting bank will then credit the customer within one hour of settlement, subject to standard safeguards.
The RBI has directed banks to communicate these changes to customers in advance, ensuring awareness of the new, faster clearing process.
This overhaul is expected to speed up fund availability for customers and align cheque processing with the efficiency levels of electronic payments.
