Now, Cheque Clearance In Just Hours, RBI Introduces New Process, Full Details Inside

In a significant customer-friendly move, the Reserve Bank of India (RBI) has announced a major overhaul of the cheque clearing system. Starting October 4, 2025, cheque payments will be processed within a few hours instead of the earlier two working days.

Under the new process, banks will instantly scan cheques deposited by customers, send them to the clearing house, and submit them for approval during banking hours. This will dramatically shorten the clearing cycle from the existing T+1 day (next working day after deposit) to just a few hours. RBI has also directed banks to keep customers well-informed about these changes and ensure complete readiness for the new continuous clearing mechanism.

How the New Cheque Clearing System Will Work

The transformation will take place through an upgrade to the Cheque Truncation System (CTS). Presently, cheques are processed in batches under CTS. This will be replaced by Continuous Clearing with “on-realisation-settlement”, implemented in two phases:

Phase 1: October 4, 2025 – January 2, 2026

• Presentation Time: 10:00 AM to 4:00 PM.
• Banks will scan cheques immediately upon receipt and send them to the clearing house continuously.
• The drawee bank (bank on which the cheque is drawn) must confirm acceptance or rejection by 7:00 PM.
• If no response is received, the cheque will be automatically considered accepted and included in the settlement.

Phase 2: From January 3, 2026

• Cheque validity will follow a T+3 clearing hours rule.
• If the drawee bank fails to respond within three hours, the cheque will be deemed accepted and added to the 2:00 PM settlement.

Why RBI Introduced This Change

According to the RBI, this reform is aimed at:

• Enhancing cheque clearing efficiency.
• Reducing payment risks for banks.
• Offering a faster and smoother customer experience.

When Will Customers Get the Money?

Once the settlement is completed, the clearing house will send confirmation details to the presenting bank. This bank must then credit the customer’s account within one hour of a successful settlement, ensuring almost real-time access to funds.

This landmark decision promises to modernise India’s cheque payment system, making it faster, safer, and more convenient for both banks and customers.