MUMBAI: The Reserve Bank of India will hold a special session on October 3 to test the system capabilities of banks for the new lower time lags for the cheque truncation system that will come into force on October 4, to ensure that banks switch smoothly to the new system.
“To facilitate transition to continuous clearing, it has been decided to modify session timings and conduct special clearing in the cheque truncation system (CTS) on October 3,” RBI said in a notification to the heads of banks.
These special clearing sessions involve specific, modified timings for returning existing cheques and presenting new ones, and it will be the only clearing session on that day, with all instruments to be processed under this special session.
The Reserve Bank had, on August 13, 2025, notified the new shorter timing for cheque clearing, offering banks only a few hours to do so, or else it would be considered cleared in two phases.
In phase 1 (from October 4 to January 2, 2026), drawee banks shall be required to confirm (positively/ negatively) cheques presented on them latest by end of confirmation session (1900 hrs), else those will be deemed to have been approved and included for settlement. Item expiry time for all cheques shall be set as 1900 hrs.
In phase 2 (from January 3, 2026), the item expiry time of cheques shall be changed to T+3 clear hours. For example, the cheques received by drawee banks between 1000 hrs and 1100 hrs will have to be confirmed positively or negatively by them by 1400 hrs (3 hours from 1100 hrs). 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 1400 hrs.
The measures are aimed at improving customer convenience by reducing settlement risks by moving to a faster, real-time clearing process, (apart from the electronic format of NEFT and RTGS), the Reserve Bank has asked banks to clear cheques within hours, starting October 4.
The special clearing presentation session will be held from 1100 hrs to 1500 hrs, while the special clearing return session will be from 1700 hrs to 2000 hrs. Before these sessions, lenders will run a return session for presentation between 0800 hrs and 1000 hrs on October 1, the regulator said.
“After closure of the return session on October 3, for the presentation done on October 1, there shall be no regular clearing sessions in the CTS on the day. All types of instruments will be accepted in special clearing only,” RBI added.
For the special clearing on October 3, banks are advised to use clearing type as “99” and session numbers as “21” (for presentation) and “22” (for return). Instruments presented with any other clearing type and session number will not be attached to the special clearing session.
Settlement will be posted for both presentation and return sessions in special clearing. Banks should maintain a sufficient balance in their settlement account to meet settlement obligations arising out of the special clearing.
All types of cheques must be processed through these special clearing sessions on this day.
Beginning October 4, the new, faster continuous clearing system, which allows for same-day settlement and faster fund access, starts the day after the special clearing.
Currently, the cheque truncation system (CTS) clears cheques in one or two working days, depending on when they are presented. With the new system, the central bank said it will roll out a new system from October 4, which aims at improving customer convenience and reduce settlement risks by moving to a faster, real-time clearing process.
The new system is over and above the electronic methods available to an accountholder in the form of NEFT, which is meant for small payments and the RTGS, which is meant for larger amounts of fund transfers. Both these fund transfer modes clear a payment within an hour in some cases, depending on the bank, and some banks complete the payments almost instantaneously too, depending on the system load at a given time.
Apart from these two, there is also an instant payment method—again small amounts—under the IMPS window, which is chargeable though.
Under the new system, cheques will be scanned, processed, and settled continuously during business hours, instead of being cleared in batches. This means that the current T+1 clearing cycle (where T is the day of cheque submission) will be reduced to just a few hours.