The Reserve Bank of India (RBI) will launch a faster cheque clearance process starting October 4, significantly reducing settlement time from two working days to just a few hours. The existing Cheque Truncation System (CTS), which works on a batch basis, will be upgraded to a continuous clearing and real-time settlement model. The rollout will occur in two phases—Phase 1 begins on October 4, followed by Phase 2 on January 3.
Under the new system, banks will scan and submit cheques continuously between 10:00 AM and 4:00 PM. These will be immediately forwarded to the drawee banks for real-time verification. In Phase 1, banks must confirm cheque status by 7:00 PM the same day, failing which the cheque is automatically considered cleared. In Phase 2, the confirmation window will shrink to three hours.
Hourly settlements will begin from 11:00 AM, and funds must be credited to customers within an hour post-settlement, subject to routine checks. The RBI aims to enhance cheque transaction efficiency, reduce delays, and improve customer service. Additionally, surplus foreign currency rupee balances can now be invested in government securities to boost market liquidity.
