Starting October 4, 2025, the Reserve Bank of India (RBI) will launch a continuous clearing and settlement regime that allows cheques to be cleared within hours, shifting away from the traditional 1–2 day wait.
Under the new system:
- Cheques presented between 10:00 AM and 4:00 PM will be scanned and forwarded immediately for processing.
- The paying bank must confirm the cheque by 7:00 PM on the same day (Phase 1). If no confirmation is given, the cheque will be deemed approved and cleared automatically.
- From January 3, 2026 (Phase 2), confirmation will need to happen within three hours of presentation.
- Once cleared, banks must credit funds to the beneficiary’s account within one hour of settlement, subject to standard checks.
This reform replaces the older batch-based Cheque Truncation System (CTS) and aims to drastically reduce delays, improve cash flow, and streamline banking operations.
The change is expected to benefit individuals and businesses alike by giving faster access to funds, lowering settlement risk, and aligning cheque processing with modern digital payment speeds.
