From October 4, 2025, cheque clearance in India will undergo a major transformation as the Reserve Bank of India (RBI) introduces a continuous processing system that will reduce settlement times from the current T+1 day cycle to just a few hours. This marks a significant shift from the long-standing delays that often left individuals and businesses waiting up to two working days for cheque payments to clear.
Under the revised rules, cheques will be scanned, presented, and cleared in real time during business hours, replacing the existing batch processing method used under the Cheque Truncation System (CTS). The initiative, called Continuous Clearing and Settlement on Realisation, will be implemented in two phases to ensure smooth adoption across banks.
Phase 1, starting October 4, 2025, will allow a single presentation session between 10:00 AM and 4:00 PM. Cheques deposited during this window will be immediately scanned and sent to the clearing house. The drawee bank—the bank on which the cheque is drawn—must confirm whether the cheque is honoured or dishonoured by the close of the confirmation session at 7:00 PM. Any cheque not responded to within this period will be deemed approved for settlement.
Phase 2, beginning January 3, 2026, will introduce a stricter three-hour confirmation rule. For example, a cheque deposited between 10:00 AM and 11:00 AM must be confirmed by 2:00 PM the same day. If the drawee bank fails to confirm within the timeframe, the cheque will be automatically treated as approved.
Once settlement is finalised, the clearing house will send confirmation details to the presenting bank, which must credit the customer’s account immediately—and no later than one hour after settlement. This ensures that funds reach recipients much faster than under the current system.
The RBI has directed all banks to educate customers about the upcoming changes and ensure that systems are ready for continuous cheque clearing before the respective rollout dates. By improving efficiency, reducing settlement risks, and enhancing customer convenience, the new system is expected to modernise cheque-based transactions and bring them closer in speed to electronic payments.
