Image Source: The Economic Times
A major overhaul is coming to the way cheques are cleared in India. Starting October 4, 2025, the Reserve Bank of India (RBI) will introduce a new, faster system for cheque processing, promising customers same-day—and in many cases, within-hours—access to their funds. This change is designed to make banking more efficient, reliable, and convenient for individuals and businesses alike.
Key Highlights
The new system moves away from the traditional batch-based Cheque Truncation System (CTS), which currently takes up to two business days to process payments. Instead, banks will now continuously scan and clear cheques during the presentation window of 10:00 AM to 4:00 PM.
Drawee banks (those on which the cheque is drawn) must send a confirmation—approving or rejecting the cheque—during a single, real-time session that stretches until 7:00 PM.
In cases where a confirmation is not sent by the deadline, cheques will be automatically considered approved, reducing the risk of delays.
The change is being rolled out in two phases: Phase 1 from October 4, 2025 to January 2, 2026 (cheques confirmed by 7:00 PM), and Phase 2 from January 3, 2026 onward (confirmation required within three hours of receipt).
After a cheque is cleared, funds must be credited to the customer’s account immediately—or no later than one hour post-settlement—ensuring faster access to money.
How the New Cheque Clearance Works
You deposit a cheque at your bank branch as usual.
Bank staff scan and upload the cheque image to the clearing house in real time, rather than waiting for the end-of-day batch.
The drawee bank gets the digital image and processes it on a rolling basis, not just at fixed intervals.
For each cheque, the bank must send a positive (honoured) or negative (dishonoured) response back. If no response, the cheque is treated as honoured.
Funds are settled and released by your bank on the same day, often within hours—significantly quicker than at present.
What Customers and Businesses Need to Know
Expect most cheques cleared and funds released on the same working day, bringing more predictability to personal and business finances.
No more waiting for “two working days” for cheque clearance, improving cash flow for businesses and reducing anxiety for individuals.
The RBI has instructed all banks to notify customers about these changes and ensure systems are ready for the faster process.
From January 2026, the three-hour deadline and hourly settlements for cheques will provide even quicker turnarounds.
Why It Matters
Faster cheque clearance boosts financial efficiency, reduces risk exposure for banks and customers, and brings India’s banking infrastructure in line with global standards.
Automatic approval where banks don’t respond cuts down on unnecessary delays and increases overall system accountability.
Looking Ahead
Banks across India are ramping up preparations: updating their digital infrastructure, training staff, and preparing customer communications for the switch. Regulators hope this landmark move will build greater trust in cheque payments, even as digital transactions grow.
Sources: AngelOne, India Today, Economic Times, The Hans India, Financial Express, Business Standard, RBI circulars, August 15, 2025
Advertisement
Advertisement
