RBI’s new cheque-clearing system brings speed & uniformity | Fusion - WeRIndia

Starting October 4, 2025, the Reserve Bank of India (RBI) has rolled out a new cheque clearing system that allows funds to be credited or debited within hours, replacing the earlier 1-2 business day timeline.

This upgraded system brings nationwide uniformity, as well as hourly settlements and automatic approvals.

Instead of batch-based processing, banks will now scan and send cheques continuously between 10 am and 4 pm.

Settlements begin from 11 am every hour. The result is near real-time processing, making the entire system faster and more efficient.

Cheques deposited between 10 am and 4 pm will be processed and settled the same day.

After settlement, funds will be credited to the customer’s account within an hour, subject to standard verification and security checks by the bank.

Two-Phase Rollout

• Phase 1 (Oct 4, 2025 – Jan 2, 2026):
• Banks must confirm cheques by 7 pm, or they will be auto-approved for settlement.
• Phase 2 (From Jan 3, 2026):
• Banks will have 3 hours to confirm each cheque. For example, a cheque received at 10 am must be confirmed by 2 pm.

Key Benefits

• Faster access to money
• Uniform clearing speed across all locations
• Simplified tracking of cheque status
• Reduced settlement risk for banks
• Improved business payments and customer convenience

It works as follows:

The drawee bank must respond either positively (honoured) or negatively (dishonoured) during the session.

If it fails to do so within the stipulated time, the cheque is deemed approved.

Background: Evolution of Cheque Clearing

• Pre-1980s: Manual processing took 7+ days
• 1980s: Introduction of MICR reduced local clearing to 1-3 days
• 2008: Cheque Truncation System (CTS) introduced; clearance within 1 day
• 2021: Nationwide grid clearing with T+1 settlement
• 2025: Now, same-day settlement in hours

This latest move by the RBI marks a major leap in India’s payment infrastructure, offering both speed and transparency to bank customers across the country.

Image by Simi from Pixahive (Free for commercial use / CC0 Public Domain)

Image Published on October 11, 2020

Image Reference: https://pixahive.com/photo/currency-notes-with-cheques/