Faster Cheque Clearing Ahead: RBI’s Continuous Settlement to Benefit Bank Customers from October 2025
The Reserve Bank of India (RBI) is set to make cheque processing faster and more efficient,bringing quicker access to funds for bank customers. Starting October 4, 2025,the Cheque Truncation System (CTS) will move from batch-based processing to a
continuous clearing and settlement on realisation model, further tightening timelines from
January 3, 2026.
Who benefits & how (at a glance)
- Individuals & businesses: Faster access to funds with same-day credit in most cases.
- Predictable timelines: Hourly settlements and strict confirmation cut-offs reduce uncertainty.
- Better cash flow: Speedier realisation improves working capital planning.
How Customers Will Benefit
- Single presentation window (10:00 AM – 4:00 PM): Cheques are scanned and sent to the clearing house immediately, cutting wait time.
- Real-time confirmations (10:00 AM – 7:00 PM): Drawee banks issue positive (honoured) or negative (dishonoured) confirmations continuously.
- Hourly settlements from 11:00 AM: Cleared cheques are included in hourly settlements, speeding up credit.
- Quick credit to your account: Presenting banks must release funds within 1 hour after settlement, subject to usual safeguards.
Key Timelines
- Phase 1 (Oct 4, 2025 – Jan 2, 2026): All cheques must be confirmed by 7:00 PM. Unconfirmed items by 7:00 PM are deemed approved for settlement.
- Phase 2 (From Jan 3, 2026): T+3 clear hours rule. Example: Cheques received 10:00–11:00 AM must be confirmed by 2:00 PM; otherwise deemed approved at 2:00 PM.
What Changes Under the Hood (For clarity)
- Continuous delivery: Clearing house releases cheque images to drawee banks continuously during the presentation session.
- Item Expiry Time on each cheque: Shows the latest time by which the drawee bank must confirm.
- Settlement on realisation: No accounting entry at presentation; only positive and deemed-approved cheques are settled; negative confirmations are excluded.
Important Points
- Banks must inform customers about the new clearing process and be ready for continuous clearing on the stated dates.
- Presentation session: 10:00 AM – 4:00 PM | Confirmation session: 10:00 AM – 7:00 PM.
- Hourly settlement cycles start at 11:00 AM and run till the end of confirmation session.
- Customer credit within 1 hour after successful settlement (subject to safeguards).
This rollout follows the announcement in the Statement on Developmental and Regulatory Policies dated
August 8, 2024. RBI has issued this directive under Section 10(2) read with Section 18 of the
Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
Leave a Reply