Starting October 4, 2025, the Reserve Bank of India will implement a faster cheque-clearing system, reducing settlement time from up to two working days to just a few hours during business hours.
In a major win for account holders and businesses alike, the Reserve Bank of India (RBI) has announced a sweeping reform to the Cheque Truncation System (CTS). Starting October 4, 2025, cheques will be cleared within hours instead of up to two working days, transforming cheque processing into a real-time experience during business hours.
What’s Changing?
Phase 1 Oct 4, 2025 – Jan 2, 2026: Continuous scanning (10 AM–4 PM); drawee banks must confirm cheques by 7 PM, else auto-approved for settlement that night.
Phase 2 From Jan 3, 2026: Cheques to be confirmed within 3 hours of receipt. Funds credited within 1 hour post-settlement.
Giving an example, the RBI said the cheques received by drawee banks between 10:00 AM and 11:00 AM will have to be confirmed positively or negatively by them by 2:00 PM (3 hours from 11:00 AM).
Cheques for which confirmation is not provided by the drawee bank in the prescribed 3 hours shall be treated as deemed approved and included for settlement at 2:00 PM.
The Reserve Bank of India (RBI) has issued a circular for introduction of Continuous Clearing and Settlement on Realisation in CTS.
“It has been decided to transition CTS to continuous clearing and settlement on realisation in two phases. Phase 1 shall be implemented on October 4, 2025 and Phase 2 on January 3, 2026,” it said.
Why It Matters to You
Faster Liquidity: Money from cheque deposits—not just electronically cleared payments—will now hit your account much quicker.
Better Predictability: Same-day confirmation or dishonour reduces uncertainty in cash flows and personal banking.
Bank Accountability: If drawee banks don’t respond within the deadline, the cheque is treated as approved—no more funds blocked by delay.
Lower Settlement Risk: Faster processing reduces the risk exposure for both customers and banks.
Cheques received by the branches shall be scanned and sent to the clearing house by the banks immediately and continuously during the presentation session, RBI said.
