RBI announces clearance of cheques within hours
The new system will be operational from 4 October
In a major reform for account holders and businesses, the Reserve Bank of India (RBI) has issued a circular for introducing Continuous Clearing and Settlement on Realisation (CCSR) in the Cheque Truncation System (CTS), whereby cheques will be cleared within hours.
As of now, it takes up to two working days to transform cheque processing into a real-time experience during business hours.
The new norms will be introduced in two phases:
Phase 1 – 4 October 2025 – 2 January 2026: Continuous scanning (10 am–4 pm); drawee banks must confirm cheques by 7 pm, or else auto-approval for settlement the same night.
Phase 2 – From 3 January 2026: Cheques to be confirmed within three hours of receipt. Funds credited within one hour post-settlement.
The RBI explained that cheques received by drawee banks between 10 am and 11 am must be confirmed positively or negatively by 2 pm (within three hours). Cheques for which confirmation is not provided by the drawee bank within three hours, shall be treated as approved and included for settlement at 2 pm.
What does it means?
Faster Liquidity: Money from cheque deposits, not just electronically cleared payments, will be debited into the account swiftly.
Better Predictability: Same-day confirmation or dishonour reduces uncertainty in cash flows and personal banking.
Bank Accountability: If drawee banks do not respond within the deadline, the cheque is treated as approved. Funds not blocked by delay.
Lower Settlement Risk: Faster processing reduces the risk exposure for both customers and banks.
The Central Bank stated that cheques received by the branches shall be scanned and sent to the clearing house by the banks immediately and continuously during the presentation session.
It added, “For every cheque presented, the drawee bank shall generate either positive confirmation (for honoured cheques) or negative confirmation (for dishonoured cheques).”
What to keep in mind
- Remain alert to changes in your bank’s handling of cheque deposits post-October.
- If you deposit a cheque before 4 pm, you can expect a confirmation or settlement that same evening, provided the drawee bank complies.
- Delays beyond 7 pm will result in automatic approval, helping avoid payment holdups.