The Reserve Bank of India (RBI) will roll out a faster cheque clearance system from October 4, 2025, enabling cheques to be cleared within hours instead of the current two-day period.
The move involves shifting the existing Cheque Truncation System (CTS) from batch processing to a continuous clearing and settlement on realisation model. According to the RBI, the change is aimed at improving efficiency, reducing settlement risk, and enhancing customer experience.
Continuous Processing During Business Hours
Under the revised framework, cheques will be scanned, presented, and processed continuously between 10:00 AM and 4:00 PM. For each cheque, the drawee bank must send a positive confirmation if honoured or a negative confirmation if dishonoured.
Two-Phase Implementation
The new system will be introduced in two stages:
- Phase 1 (Oct 4, 2025 – Jan 2, 2026): Drawee banks must confirm cheques by 7:00 PM on the same day, failing which they will be deemed approved for settlement.
- Phase 2 (From Jan 3, 2026): An ‘item expiry time’ of T+3 clear hours will apply. For example, cheques received between 10:00 AM and 11:00 AM must be confirmed by 2:00 PM or they will be automatically approved and settled.
Immediate Credit to Customers
Once settlement is complete, the clearing house will send details to the presenting bank, which must release funds to the customer immediately — and no later than one hour after settlement — subject to necessary safeguards.
The RBI has instructed banks to prepare for the transition and inform customers of the new timelines.
