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Informist, Wednesday, Aug. 13, 2025

 

--RBI: To move to continuous clearing, settlement of cheques in 2 phases 

--RBI: Phase 1 of move to continuous clearing of cheques from Oct 4 

--RBI: Phase 2 of move to continuous clearing of cheques from Jan 3 

--CONTEXT: Banks currently clear, settle cheques using batch processing 

 

NEW DELHI – The Reserve Bank of India Wednesday said banks will shift to continuous clearing and settlement of cheques, a move that will reduce the time taken to process cheques to hours from the present timeline of up to two days. Currently, banks use the batch processing approach to clear cheques.

 

Banks will shift to the Cheque Truncation System to continuous clearing in two phases. The first phase will be implemented on Oct. 4 and the second will be operational from Jan. 3, the RBI said.

 

Once a cheque is settled, a bank will have to release the payment to customers immediately and not later than one hour from a successful settlement, the RBI said. 

 

Under continuous clearing, customers will be able to submit cheques in a single presentation session between 1000 IST and 1600 IST. Banks will send the cheques received to the clearing house immediately and continuously during the presentation session, the RBI said.

 

The confirmation session will begin at 1000 IST and end at 1900 IST. Each cheque will contain the 'Item Expiry Time', which indicates the latest time by which confirmation for the presented instrument needs to be provided by the drawee bank, the RBI said. Drawee banks will have to continuously process cheques throughout the day and on a real-time basis as soon as cheque images are received.

 

During the first phase of transition, drawee banks, or banks responsible for paying the amount, will have to confirm honoured or dishonoured cheques presented on them by 1900 IST. If bank don't confirm the cheques by 1900 IST, they will be deemed to have been approved and included for settlement, the RBI said. Item expiry time for all cheques will be set as 1900 IST in the first phase.

 

In phase 2, the item expiry time of cheques will be changed to T+3 clear hours. This would mean a cheque received by a drawee bank between 1000 IST and 1100 IST will have to be confirmed positively or negatively by the bank by 1400 IST, which is three hours from 1100 IST. Cheques for which confirmation is not provided by the drawee bank in the prescribed three hours will be treated as deemed approved and included for settlement.

 

"No accounting entries (settlement) will be posted for presentation of cheques," the RBI said. "Starting from 11:00 AM, settlement will be arrived every hour till the end of confirmation session, based on the positive confirmations received from drawee banks and cheques considered deemed approved." No accounting entries will be passed for cheques with negative confirmation, the central bank said.  End

 

Reported by Shubham Rana

Edited by Avishek Dutta

 

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