RBI to Clear Cheques Within Hours from 4 October 2025
New Cheque Clearance System to Be Implemented in Two Phases
Starting 4 October 2025, cheques deposited in Indian banks will be cleared within a few hours, thanks to a new system being implemented by the Reserve Bank of India (RBI). The new system will be rolled out in two phases, with the first phase running from 4 October 2025 to 3 January 2026, and the second phase beginning thereafter.
The RBI is upgrading the current Cheque Truncation System (CTS) to a new model called Continuous Clearing and Settlement on Realisation. This move will reduce the cheque clearance time from two days to just a few hours.
How the New System Will Work
According to the RBI, banks will need to scan cheques and send them to the clearing house digitally. The process will have only one presentation session between 10:00 AM and 4:00 PM daily.
The clearing house will forward the scanned cheque image to the paying bank. The paying bank will then have time from 10:00 AM to 7:00 PM to respond with either a positive or negative remark on the cheque.
Each cheque will have a specific "Item Expiry Time", by which the bank must respond. If no response is received within the allotted time, the cheque will be considered approved and included for settlement automatically.
Phase 1: From 4 October 2025 to 3 January 2026
During the first phase, the Item Expiry Time for all banks will be set at 7:00 PM. If a bank does not respond by this time, the cheque will be auto-approved.
Phase 2: After 3 January 2026
In the second phase, the cheque clearance window will be shortened to three hours. That means a cheque must be confirmed within 3 hours of presentation.
For example, if a cheque is presented between 10:00 AM and 11:00 AM, the paying bank must respond positively or negatively by 2:00 PM. If not, the cheque will be deemed approved at that time and moved to settlement.
Once the settlement is complete, the clearing house will notify the presenting bank of the final status (positive or negative), and the presenting bank will immediately credit the amount to the customer.