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No More 1–2 Day Wait: Cheques To Clear Within Hours From October 4
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RBI launches continuous clearing and settlement for CTS-enabled cheques from October 04, enabling same-day clearance nationwide.
rom Tomorrow, Cheques Won’t Take 1–2 Days—Funds to Reflect in Hours
In a major overhaul, the Reserve Bank of India (RBI) is going away from the existing batch-processing model (which takes up to two working days). A new framework known as a continuous clearing and settlement on realization framework will become effective from tomorrow, October 04. It is Phase 2 of the major overhaul of the cheque clearing system across the country, which is divided in 2 phases.
The Continuous Clearing and Settlement on Realisation will ensure cheque clearance within a few hours, reduce settlement risks and improve efficiency and customer experience.
Instead of fixed-batch cycles, the cheques will be scanned, presented and cleared in real-time processing during business hours (10:00 Am to 4:00 PM).
This will help customers to get funds through cheques on the same day, typically within hours, reducing the typical 1–2 day wait. Note that this applies to all CTS-enabled cheques across India. There are no changes to physical cheque issuance rules.
Process Flow:
- Presenting banks scan and send cheque images/MICR data to the clearing house immediately upon receipt.
- The clearing house forwards these to drawee banks (the paying bank) in real-time.
- Drawee banks provide positive (honour) or negative (dishonour) confirmation.
- Settlements occur hourly until the end of the confirmation session (7:00 PM).
- Once settled, presenting banks must credit funds to customers’ accounts within one hour, subject to standard safeguards.
Phase 2 To Bring T+3 Settlement
Phase 2, which is expected to be implemented from January 03, 2026 onwards, will expedite the process faster. Phase 2 will introduce T+3 clearance hours (item expiry time), which means cheques presented 10:00–11:00 AM must be confirmed by 2:00 PM; unconfirmed ones are deemed approved at expiry.
This mechanism sets a strict timeline for drawee banks (the bank on which the cheque is drawn) to confirm whether a cheque is honoured or dishonoured, ensuring faster cheque clearance within hours on the same day.
T+3 refers to a time-bound process where a cheque presented to the clearing house must be confirmed (either honoured or dishonoured) by the drawee bank within three hours from the time of its presentation.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
October 03, 2025, 14:42 IST
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