RBI’s new regulation: starting today, checks must clear in a matter of hours

Checks will be continually scanned, presented, and cleared during business hours under the new regulation, cutting down on the clearing cycle from the current T+1 days to a few hours.

In India, clearing checks has historically been a laborious procedure that can take up to two working days. Businesses and people that depend on check payments have experienced inconvenience as a result of this delay.

That inconvenience will be mostly eliminated starting on October 4, 2025, when the Reserve Bank of India (RBI) plans to implement a quicker clearance system that will conduct checks in a matter of hours.

The new regulation will shorten the clearing cycle from the current T+1 days to a few hours by requiring checks to be continually scanned, presented, and cleared during business hours. The Cheque Truncation System (CTS), which has up to now operated on batch processing, will undergo this modification.

The RBI circular states that the Continuous Clearing and Settlement on Realization mechanism will be implemented in two stages.

On October 4, 2025, Phase 1 will start, and on January 3, 2026, Phase 2 will follow. The change is intended to increase client convenience, lower settlement risks, and boost efficiency.

A single presentation session will take place in the revised configuration from 10:00 AM to 4:00 PM. During this time, checks left at bank branches will be scanned and promptly forwarded to the clearing house. A positive confirmation for checks that are honored or a negative confirmation for checks that are not honored will thereafter be sent by the drawee bank, which is the bank on which the check is drawn.

Drawee banks are required to confirm checks by 7:00 PM at the conclusion of the confirmation session during Phase 1. The checks will be deemed accepted and added to the settlement if they don’t reply.

Phase 2 will introduce a more stringent schedule. Checks must be verified within three hours after presentation starting on January 3, 2026. For instance, it needs to be verified by 2:00 PM if a check is received between 10:00 AM and 11:00 AM. If no confirmation is given within the time limit, the cheque will be deemed approved.

The presenting bank must release the monies to the customer as soon as possible, but no later than one hour following settlement, after receiving confirmation data from the clearing house.

The RBI has directed banks to make sure they are prepared to handle continuous check clearing starting on the implementation dates and to notify clients about the new procedure.

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