From October 4, the clearance time of cheques will be a few hours instead of up to two working days.
Under a new mechanism, the Reserve Bank of India (RBI) has decided to transition the Cheque Truncation System (CTS) from the current method of batch processing to continuous clearing by which cheques will be scanned, presented, and passed in a few business hours.
The central bank issued a circular for the introduction of Continuous Clearing and Settlement on Realisation in CTS, saying, “It has been decided to transition CTS to continuous clearing and settlement on realisation in two phases. Phase 1 shall be implemented on October 4, 2025 and Phase 2 on January 3, 2026”.
There will be a single presentation session from 10.00 a.m. to 4.00 p.m., said the bank, during which cheques received by the branches shall be scanned and sent to the clearing house immediately and continuously.
“For every cheque presented, the drawee bank shall generate either positive confirmation (for honoured cheques) or negative confirmation (for dishonoured cheques),” the bank stated.
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“For every cheque presented, the drawee bank shall generate either positive confirmation (for honoured cheques) or negative confirmation (for dishonoured cheques),” the bank stated.
Sharing more information, the apex bank said that during Phase 1 (from October 4, 2025 to January 2, 2026), drawee banks will be required to confirm (positively/negatively) cheques presented on them by the end of the confirmation session, which is 7.00 p.m., failing which the cheques will be deemed to have been approved and included for settlement.
In Phase 2, which starts from January 3, 2026, the item expiry time of cheques shall be changed to T+3 clear hours.
Giving an instance, the bank said all cheques received by drawee banks between 10.00 a.m. and 11.00 a.m. will have to be confirmed positively or negatively by them by 2.00 p.m. (three hours from 11.00 a.m.)
So, the cheques for which confirmation is not provided by the drawee bank in the prescribed three hours shall be deemed to have been approved and included for settlement at 2.00 p.m.
The bank also said that the clearing house will release the information of positive and negative confirmations to the presenting bank on the completion of settlement.
"The presenting bank shall process the same and release the payment to the customers immediately, but not later than 1 hour from successful settlement, subject to usual safeguards," it said.
The RBI also directed the banks to be prepared to undertake continuous clearing in CTS on the prescribed dates and to also let their customers know about the latest changes in the cheque-clearing process.
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