Mumbai, August 14, 2025: In a major boost to banking efficiency, the Reserve Bank of India (RBI) has announced that starting October 4, 2025, cheques submitted to banks will be processed and funds transferred within hours, a significant leap from the current maximum of two working days. This transformative move aims to streamline cheque clearance processes and minimize risks associated with delayed fund transfers.
Faster Processing with Continuous Clearance
Under the new system, banks will scan cheques and forward them instantly to the relevant clearing agencies for approval, enabling near-real-time fund transfers. Unlike the existing batch-processing method, cheques will now be verified continuously, ensuring quicker access to funds for customers. The RBI emphasized that this change will enhance operational efficiency and reduce the risk of fraud or delays in cheque-based transactions.
Phased Rollout for Seamless Transition
The RBI has outlined a two-phase implementation for the new system. In Phase 1 (October 4, 2025 – January 2, 2026), banks must approve or reject cheques by 7:00 PM on the same day they are presented. If no response is received by this deadline, cheques will be automatically approved and settled. From Phase 2 (January 3, 2026), banks will need to confirm cheques within three hours of receipt. For instance, a cheque deposited between 10:00 AM and 11:00 AM must be processed by 2:00 PM. Non-compliance will result in automatic approval and clearance.
Banks Urged to Inform Customers
The RBI has directed banks to proactively communicate these changes to their customers to ensure a smooth transition. Banks will adopt advanced scanning and verification technologies to facilitate this seamless process, aligning with the central bank’s vision of modernizing India’s financial infrastructure.
This reform is expected to benefit millions of customers and businesses reliant on cheque transactions, making payments faster and more secure.
Keywords: RBI, cheque clearance, same-day clearance, real-time processing, Cheque Truncation System, banking reform, fund transfer, October 2025, continuous clearance, settlement risk.