Bank account holders need not wait for two days to have their cheques cleared. 

Starting 4 October, the Reserve Bank of India (RBI) will introduce a new system to clear cheques within a few hours. This will curtail the current processing system, which takes up to two working days for cheques to clear.

Under the new mechanism, cheques will be scanned, presented and passed in a few hours, on a continuous basis during business hours. The clearing cycle will be reduced from the present T+1 days (T is the day of cheque deposit) to a few hours. 

Currently, the Cheque Truncation System (CTS) processes cheques with a clearing cycle of up to two working days.

For improving efficiency, the RBI has decided to transition CTS from the current approach of batch processing to continuous clearing with 'on-realisation-settlement'.

The RBI has issued a circular for introduction of Continuous Clearing and Settlement on Realisation in CTS.

"It has been decided to transition CTS to continuous clearing and settlement on realisation in two phases. Phase 1 shall be implemented on October 4, 2025 and Phase 2 on January 3, 2026," it said.

There will be a single presentation session from 10 am to 4 pm.

“The clearing house will in turn release the cheque images to drawee banks on a continuous basis,” RBI said.

Cheques received by the branches shall be scanned and sent to the clearing house by the banks immediately and continuously during the presentation session.

"For every cheque presented, the drawee bank shall generate either positive confirmation (for honoured cheques) or negative confirmation (for dishonoured cheques)," RBI said.

During Phase 1 (from October 4, 2025 to January 2, 2026), drawee banks will be required to confirm (positively/negatively) cheques presented on them, latest by the end of the confirmation session (7 pm), else those will be deemed to have been approved and included for settlement.

In Phase 2 (from January 3, 2026), the item expiry time of cheques shall be changed to T+3 clear hours. 

Giving an example, the RBI said the cheques received by drawee banks between 10 am and 11 am will have to be confirmed positively or negatively by them by 2 pm (3 hours from 11 am).

Cheques for which confirmation is not provided by the drawee bank in the prescribed 3 hours shall be treated as deemed approved and included for settlement at 2 pm.

RBI said that on completion of settlement, the clearing house will release the information of positive and negative confirmations to the presenting bank.

"The presenting bank shall process the same and release the payment to the customers immediately, but not later than 1 hour from successful settlement, subject to usual safeguards," it said.