RBI proposes to reduce cheque clearance time to a few hours

The Reserve Bank of India (RBI) has announced a major change in the cheque-clearing process.

RBI Governor Shaktikanta Das announced this new initiative during the Monetary Policy Committee (MPC) meeting announcement.

The new system aims to cut the time needed for cheque clearing from the current two-day period to just a few hours.

“Cheque Truncation System (CTS) currently processes cheques with a clearing cycle of up to two working days. To improve the efficiency of cheque clearing and reduce settlement risk for participants, and to enhance customer experience, it is proposed to transition CTS from the current approach of batch processing to continuous clearing with ‘on-realisation-settlement’. Cheques will be scanned, presented, and passed in a few hours and on a continuous basis during business hours. The clearing cycle will reduce from the present T+1 days to a few hours,” said a RBI press release.

Governor Das explained that the updated system is designed to simplify and speed up the cheque-clearing process. This move addresses long-standing delays in fund transfers and aims to make transactions more efficient overall.

With this new system, account holders can expect faster processing of cheque-based transactions. This change will allow funds to be credited more quickly, which is beneficial for urgent payments and better financial planning. Both individuals and businesses will see improved liquidity and a more efficient banking experience.