New Mechanism For Cheque Clearance From October: Check Key Changes Proposed By RBI

Reserve Bank of India will roll out a faster cheque clearance system from Oct. 4. Under the new guidelines, banks will scan, submit and clear cheques within a few hours. The new guidelines propose a significant change in cheque clearance from the current process, which generally takes up to two working days for settlement.

The changes aim to cut down the existing cheque clearing time. Under the revised system, cheque clearing will take place continuously during business hours. To enable this, the RBI will change the Cheque Truncation System (CTS) system from batch processing to continuous clearing and settlement model. 

"It has been decided to transition CTS to continuous clearing and settlement on realisation in two phases. Phase 1 shall be implemented on Oct. 4, 2025, and Phase 2 on Jan. 3, 2026," the apex bank said.

1.    The RBI will roll out continuous clearing and settlement 'on realisation' in the CTS.

2.    The implementation will be in two phases: the first phase starts on Oct. 4, 2025, and the second phase on Jan. 3, 2026.
3. There will be a single presentation session from 10 a.m. to 4 p.m.
4. Cheques received by bank branches will be scanned and sent to the clearing house immediately and continuously during this session.

According to RBI, “For every cheque presented, the drawee bank shall generate either positive confirmation (for honoured cheques) or negative confirmation (for dishonoured cheques).”

From Oct. 4, banks must confirm cheques by 7 p.m., or the cheques will be treated as approved. From Jan. 3, 2026, the cheque expiry time will change to T+3 clear hours. This will speed up settlement while improving cheque processing.

For example, cheques received between 10 a.m. and 11 a.m. must be confirmed by 2 p.m. If the drawee bank does not confirm within the three-hour window, the cheques will be treated as deemed approved and included for settlement automatically at 2 p.m., the apex bank explained.

Once the settlement is complete, the clearing house will send confirmation details to the presenting bank. The RBI has said that the presenting bank should process this information and pay customers no later than one hour after settlement. This has to be carried out while following normal safety checks.