Mumbai, August 14, 2025: In a major step to enhance banking efficiency and customer convenience, the Reserve Bank of India (RBI) will roll out a new Continuous Clearing and Settlement on Realisation mechanism for cheque transactions starting October 4, 2025. This move will reduce the cheque clearance time from the existing T+1 days to just a few hours.
Currently, the Cheque Truncation System (CTS) processes cheques in batches, with settlements taking up to two working days. Under the new system, cheques will be scanned, presented, and cleared continuously during business hours, drastically cutting down the settlement cycle.
Two-Phase Implementation
According to the RBI circular:
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Phase 1 (October 4, 2025 – January 2, 2026):
Cheques will be presented in a single session from 10:00 AM to 4:00 PM. Drawee banks must confirm each cheque—either honoured or dishonoured—by 7:00 PM the same day. If no confirmation is provided, the cheque will be deemed approved and processed for settlement. -
Phase 2 (From January 3, 2026):
The cheque expiry timeline will shift to T+3 clear hours. For instance, a cheque presented between 10:00 AM and 11:00 AM must be confirmed by 2:00 PM. Any cheque without confirmation within this 3-hour window will be automatically considered approved for settlement.
Faster Settlement and Customer Credit
Once the settlement is completed, the clearing house will share the confirmation status with the presenting bank, which will then release funds to customers within one hour of settlement, subject to standard safeguards.
Benefits for Customers and Banks
RBI stated that the shift to continuous clearing will:
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Improve the efficiency of cheque processing.
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Reduce settlement risks for participating banks.
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Provide a faster, more seamless experience for customers.
Banks have been instructed to inform customers about the new changes and ensure readiness for the updated cheque clearing process from the prescribed dates.
