RBI asks banks to clear cheques within hours from Oct 4
MUMBAI: To improve 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.
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, 2025, 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 not big 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 completes te 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.
In fact there is no limit that RBI has set for NEFT and the cap depends on individual banks. For instance, SBI allows up to Rs 25 lakh in NEFT transfers under retail internet banking, while HDFC Bank has limits for newly-added beneficiaries.
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.
In phase 1 from October 4, 2025–January 2, 2026, banks must confirm (approve/reject) cheques presented to them by 7:00 pm the same day. If a bank does not respond by 7 pm, the cheque will be automatically treated as approved and included for settlement. The deadline for processing all cheques will be 7 pm.
Phase 2 from January 3, 2026, cheques will need to be confirmed within 3 hours of being received by the bank. That means if a cheque is received between 10 am and 11 am, the bank must confirm it by 2 pm that’s within three hours from submission. And if the bank fails to respond in time, the cheque will again be considered approved by default and cleared.