The Reserve Bank of India (RBI) will launch a faster cheque clearance mechanism from October 4, 2025, reducing the present wait time of up to two working days to just a few hours. The upgrade will transform the Cheque Truncation System (CTS) from batch processing to a “continuous clearing and settlement on realisation” model, enhancing speed, lowering settlement risks, and improving customer convenience.
Under the new system, cheques will be scanned, presented, and processed continuously between 10:00 AM and 4:00 PM on business days. For each cheque, the drawee bank must provide either a positive confirmation for honoured cheques or a negative confirmation for dishonoured ones.
Implementation will occur in two phases. Phase 1, from October 4, 2025, to January 2, 2026, will require drawee banks to confirm cheques by 7:00 PM the same day, failing which they will be deemed approved for settlement. Phase 2, starting January 3, 2026, will enforce an ‘item expiry time’ of T+3 clear hours—for example, cheques received between 10:00 AM and 11:00 AM must be confirmed by 2:00 PM or will be automatically settled.
Once settlement is complete, the clearing house will send details to the presenting bank, which must credit funds to customers immediately, and no later than one hour after settlement, subject to safeguards.
The RBI has directed banks to prepare for the shift and update customers on the revised timelines.