Banking Revolution: RBI’s New Rule for Same-Day Cheque Clearance from Oct 4
The Reserve Bank of India (RBI) has unveiled a major reform
to make cheque clearance much faster. From October 4, 2025, cheques will
be cleared within hours, replacing the current system that can take up
to two working days.
What’s Changing?
- Faster
Clearance: Under the new system, cheques will be processed and settled
on the same day, often within mere hours. This is a significant
shift from the traditional two-day (T+1) cycle.
- Continuous
Settlement: The reform moves away from batch processing to a continuous
settlement model using the Cheque Truncation System (CTS). Cheques are
scanned, transmitted, and cleared throughout business hours.
- Phased
Rollout: The reform starts on October 4 and will be deployed in
phases, ensuring smooth transition and minimal disruption.
Why It Matters
- Better
Customer Experience: People and businesses get access to funds much
sooner, improving liquidity and usability.
- Lower
Settlement Risks: Settling cheques faster reduces risks for both banks
and customers.
- Cost
Savings for Banks: With reduced processing time and less reliance on
physical cheque movement, banks can cut operational costs.
- Aligns
with Modern Payments: The time gap between traditional cheques and
digital methods like NEFT, RTGS, and IMPS is closing.
A Historical Shift
The CTS system has been in place since 2008–10, allowing
cheque images to be transmitted electronically instead of physical instruments
being sent across banks. This sped up clearing but still relied on batch
cycles. The new continuous model builds on that for even faster processing.
Expert Opinions
RBI Governor Shaktikanta Das emphasized that this
reform will greatly improve customer service. The goal is to make cheque
transactions as user-friendly and fast as modern digital transfers.
Summary Table
|
Aspect |
Current System |
New System (from Oct 4, 2025) |
|
Clearing Time |
Up to 2 working days |
Within a few hours on same day |
|
Processing Method |
Batch mode |
Continuous clearing via CTS |
|
Customer Benefit |
Slow fund access |
Quick access to funds |
|
Bank Benefit |
Higher processing cost |
Cheaper, more efficient operations |
|
Alignment with Digital |
Slower than NEFT/RTGS |
Closer in speed to real-time systems |
Source- Time of India
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