By Salonee Kulkarni
The Reserve Bank of India, from October 4, will introduce a new mechanism that efficiently clears cheques within a few hours. Thus, reducing the current period to two working days. Currently, the cheques are processed under the Cheque Truncation System. The clearing cycle is up to two working days.
The transition from CTS to continuous clearing with “on-realisation-settlement” is to ensure that the cheque clearance is efficient. The settlement risk is reduced, and the customer experience is enhanced.
A circular has been issued by the RBI to introduce continuous clearing and settlement on Realisation in CTS. The transition will be implemented in two phases. On October 4, 2025, the first phase will begin, and on January 3, 2026, the second phase will begin. A session will be held on August 15, 2025, from 10:00 AM to 4:00 PM.
RBI further added that after the scanning of the cheques received by the branches, the cheques should be sent to the clearing houses. This process must be complied with immediately and continuously.
Phase one, starting from October four, drawee banks are expected to present Cheques. The Cheques can be both positive and negative. The confirmation session is still at 7:00 PM. The Cheques which do not have a confirmation will be considered as approved and included for settlement.
Phase two, starting from January twenty-six, will include an expiry time for cheques which will be T+3 hours.
The clearing house will release the information on completion of the settlement. The information presented can be both positive and negative. The statement quoted, “The presenting bank shall process the same and release the payment to the customers immediately, but not later than 1 hour from successful settlement, subject to usual safeguards.”
Banks have been directed by the RBI to educate their customers about the recent cheque clearing process and ensure that the customers are accustomed to the recent changes, and Banks should comply and prepare to implement the continuous clearing in CTS as per the prescribed dates mentioned by the RBI.