The Reserve Bank of India announced on Wednesday a revamp of the Cheque Truncation System to speed up cheque clearance and settlements.
From Oct 4, cheque processing will move from the existing batch system to a continuous clearing and settlement on realization framework. The rollout will happen in two phases, according to an RBI notification.
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Under phase 1, starting Oct. 4, will require drawee banks to confirm cheques by the end of the day which is 7 pm. If they fail to do so, they will be deemed approved for settlement.
Under phase 2, beginning Jan. 3, will shorten the confirmation window to just three hours from the time a cheque is received.
Under the new system, banks will scan and submit cheques to the clearing house continuously between 10 a.m. and 4 p.m. The clearing house will release cheque images to drawee banks in real time, and settlements will occur every hour from 11 a.m. until the close of processing, the RBI said.
Customers can expect to receive funds within an hour after settlement, subject to regular safeguards.
The RBI has directed banks to prepare for the transition and to ensure customers are well informed about these changes. The move is aimed at enhancing efficiency, reducing settlement delays and improving customer experience in cheque-based transactions.
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