RBI to launch continuous cheque clearing from October 4, enabling settlement within hours instead of two days, modernizing India’s cheque-based transactions.
The Reserve Bank of India (RBI), the country’s central bank, has announced a major upgrade in cheque settlement that will significantly reduce clearance times. Starting October 4, 2025, cheques will be cleared within hours instead of the current two working days, as the Cheque Truncation System (CTS) transitions to continuous clearing.
Under the new mechanism, banks will scan and transmit cheques to the clearing house immediately during a single presentation window from 10:00 AM to 4:00 PM. This shift to near real-time settlement will be rolled out in two phases—Phase 1 on October 4, 2025, and Phase 2 on January 3, 2026.
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For customers, the change means faster access to funds, reduced float time, and more efficient liquidity management. For banks, it improves operational efficiency and reduces systemic settlement risk. Analysts highlight that quicker cheque processing is a step toward aligning traditional payment methods with the speed and transparency of modern digital payment systems.
This reform comes at a time when cheque usage, though declining, remains a critical payment method for businesses, government disbursements, and high-value transactions across India. By adopting continuous clearing, the RBI is aiming to modernize cheque-based transactions while ensuring inclusivity for customers who still rely on paper-based instruments.
Industry experts believe the move will improve trust in cheque transactions, enhance efficiency in working capital cycles, and narrow the gap between digital and traditional banking channels. Banks have been directed to inform customers in advance to ensure a smooth transition.
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