Now expect cheques to be cleared within hours, benefitting both the payer and the payee. 

The Reserve Bank of India Governor Shaktikanta Das on Thursday said the cheque-clearing cycle will reduce from the current two business days to a few hours.

The reduction in time will bring cheque clearance closer to the rapid transfer speeds offered by National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS).

As of now, cheques are being cleared under the Cheque Truncation System (CTS) in a batch processing mode. This clearing process takes a cycle of up to two days from depositing the cheque.

In the proposed system, cheques will be scanned, presented and passed in a few hours and continuously during business hours. The clearing cycle will, thus, reduce from the present T+1 days to a few hours. The RBI will soon issue detailed guidelines in this regard.

“It is proposed to reduce the clearing cycle by introducing continuous clearing with 'on-realisation-settlement’ in CTS,” said Das. 

This means that cheques will be cleared within a few hours on the day of presentation, which will speed up cheque payments and benefit both the payer and the payee, Das added.