RBI defers Phase 2 of CTS, revises clearing hours | Fusion - WeRIndia

The Reserve Bank of India has decided to postpone the implementation of Phase 2 of the Continuous Clearing and Settlement on Realisation (CCSR) under the Cheque Truncation System until further notice.

The central bank said the decision was taken to give banks additional time to align their systems and operational processes with the new framework.

Phase 2 was earlier scheduled to come into effect from January 3, 2026.

Although Phase 2 has been deferred, the RBI has revised the daily operating hours of the Cheque Truncation System.

Under the new schedule, the presentation session will now operate from 9:00 AM to 3:00 PM. Meanwhile, the confirmation session has been extended and will run from 9:00 AM to 7:00 PM.

The revised timings aim to improve efficiency and allow banks more flexibility in processing cheques.

Phase 2 of the Cheque Truncation System is designed to significantly speed up cheque clearance. It introduces a T+3 clearance timeline, also referred to as the item expiry time.

Under this system, cheques presented between 10:00 AM and 11:00 AM must be confirmed by the drawee bank by 2:00 PM. If confirmation is not provided within this time, the cheque is automatically treated as approved at the expiry point.

The new mechanism places strict timelines on drawee banks, which are responsible for confirming whether a cheque is honoured or dishonoured.

By enforcing time-bound confirmation, Phase 2 aims to ensure that cheque clearing is completed within hours on the same day. This would mark a major improvement over existing timelines.

The term T+3 refers to a structured process where the drawee bank must act within three hours of the cheque being presented to the clearing house.

This system is intended to reduce delays, enhance predictability, and improve customer experience in cheque-based transactions.

For now, banks will continue operating under the existing framework while preparing for Phase 2 implementation.

The RBI is expected to announce a revised rollout date once banks are fully ready to adopt the enhanced clearing mechanism.

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