RBI Introduces Faster Cheque Clearing Mechanism for Enhanced Bank Efficiency

The Reserve Bank of India (RBI) will roll out a new mechanism from October 4 to expedite cheque clearance within hours. This shift from the existing time frame aims to improve efficiency by transitioning to continuous clearance and settlement of cheques using the Cheque Truncation System (CTS).

The Reserve Bank of India (RBI) is set to revolutionize cheque clearing by implementing a mechanism that expedites the process from up to two days to a matter of hours. This new method will come into effect on October 4 and aims to enhance both efficiency and customer experience across Indian banks.

The RBI plans to shift the existing Cheque Truncation System (CTS) to a continuous clearing approach, allowing cheques to be processed and settled during business hours. The implementation of this two-phase transition will span from October 2025, culminating in January 2026, further aiming to minimize settlement risks.

Banks are tasked with instantly scanning and transmitting cheques during prescribed hours, and they must confirm the status of each within three hours. Cheques that lack confirmation will be automatically approved for settlement, ensuring prompt processing and release to customers shortly after the completion of settlements.

(With inputs from agencies.)