The Reserve Bank of India (RBI) has announced the establishment of a new cheque-clearing mechanism. The initiative, revealed by RBI Governor Shaktikanta Das during Monetary Policy Committee (MPC) announcements, is set to reduce the time required for cheque clearing to just a few hours, within the same day.

Currently, the Cheque Truncation System (CTS) processes cheques through a batch-clearing cycle that can take up to two working days.

To address this delay, the RBI is transitioning CTS to a continuous clearing model.

This new approach will involve ‘on-realisation-settlement,’ where cheques are scanned, presented, and passed on a continuous basis during business hours.

Implications for Account Holders

The move to continuous clearing is expected to significantly enhance cheque transaction efficiency.

With the clearing cycle reduced from the existing T+1 days to just a few hours, account holders will benefit from faster access to funds.

This change is anticipated to streamline financial operations, improve liquidity, and reduce uncertainties associated with cheque-based transactions.

The RBI will issue detailed guidelines on this new system soon, further clarifying how the transition will be implemented.

Governor Das highlighted that the new system is designed to streamline the cheque-clearing process, addressing a long-standing issue of delays in fund transfers and improving overall transaction efficiency.

Catch all RBI policy related updates here