Reserve Bank of India Launches Swift Cheque Clearance System

The Reserve Bank of India (RBI) is set to implement a new cheque clearance system, effective from October 4, 2025. This initiative aims to revolutionise the current cheque processing timeline, reducing it from as much as two working days to a matter of hours. The revised system will enhance efficiency and streamline operations for banks, enabling them to scan, submit, and clear cheques more rapidly.

Key Changes in Cheque Clearance

Under the proposed guidelines, cheque clearance will transition from the current batch processing method to a continuous clearing and settlement model. The RBI plans to execute this transition in two phases. The first phase will commence on October 4, 2025, followed by the second phase on January 3, 2026.

During business hours, cheque clearing will occur continuously, with a single presentation session scheduled from 10 a.m. to 4 p.m.. Cheques received by bank branches will be scanned and sent to the clearing house immediately. According to the RBI, “For every cheque presented, the drawee bank shall generate either positive confirmation (for honoured cheques) or negative confirmation (for dishonoured cheques).”

From October 4, banks are required to confirm cheque transactions by 7 p.m.. If a cheque is not confirmed within this timeframe, it will automatically be treated as approved. Furthermore, starting on January 3, 2026, the expiry time for cheques will shift to T+3 clear hours, speeding up the settlement process and improving overall cheque processing.

For instance, cheques received between 10 a.m. and 11 a.m. must be confirmed by 2 p.m.. If the drawee bank fails to confirm within this three-hour window, the cheque will be deemed approved and included in the settlement at 2 p.m. as per the RBI’s guidelines.

Once settlement is finalised, the clearing house will convey confirmation details to the presenting bank. The RBI stipulates that this bank must process the information and ensure customer payments occur no later than one hour after settlement, while still adhering to standard safety checks.

This overhaul of the cheque clearance system is poised to significantly improve the efficiency of banking operations across India. As the RBI implements these changes, financial institutions and customers alike may experience a more streamlined and timely banking experience.