Same-Day Cheque Clearance Across Banks from Tomorrow: RBI Move
Same-Day Cheque Clearance Across Banks from Tomorrow: RBI Move
New settlement system to cut cheque clearance time from T+1 day to a few hours; rollout in two phases
From October 4, customers depositing cheques will no longer have to wait a day for clearance. The Reserve Bank of India (RBI) has introduced a new settlement system under which cheques will be cleared within a few hours on the same day. Private sector lenders, including HDFC Bank and ICICI Bank, have confirmed they will implement the system in line with RBI’s updated framework for faster and more secure payments.
Under the new process, cheques deposited between 10:00 AM and 4:00 PM will be scanned and sent electronically to the clearing house immediately. The drawee bank will then issue a positive confirmation for honoured cheques or a negative confirmation for dishonoured ones. During Phase 1, effective from October 4, 2025, banks must confirm cheques by 7:00 PM. If no response is received by then, the cheque will be deemed approved and settled.
Phase 2 of the system will begin on January 3, 2026, introducing stricter timelines. Banks will be required to confirm cheques within three hours of presentation. For instance, cheques deposited between 10:00 AM and 11:00 AM must be confirmed by 2:00 PM. If a bank fails to confirm within the window, the cheque will be automatically treated as approved.
Once settlement is complete, the presenting bank must release funds to the customer immediately, and no later than one hour after confirmation. The change, part of RBI’s Continuous Clearing and Settlement on Realisation framework, is expected to improve efficiency, cut settlement risks, and significantly enhance customer convenience.
To prevent delays or rejections, banks have urged customers to ensure accurate cheque details, including matching amounts in words and figures, valid dates, and proper signatures. Customers are also encouraged to use the Positive Pay System, which requires prior submission of cheque details such as account number, cheque number, date, amount, and beneficiary name for added security.
Positive Pay has been made mandatory for cheques above ₹5 lakh and is strongly recommended for those above ₹50,000. Cheques validated under this system will also be covered by RBI’s dispute resolution framework.
Currently, under the Cheque Truncation System (CTS), electronic images of cheques are sent for clearance, but settlement typically takes T+1 working day, especially for cheques deposited in drop boxes or ATMs. The new continuous clearing model will cut this timeline drastically.
