RBI Postpones Cheque Clearance Phase-2

The Reserve Bank of India has indefinitely postponed Phase-2 of the Continuous Cheque Clearing System, citing the need to provide banks with additional time to strengthen operational readiness and streamline internal processes. The decision reflects a cautious regulatory approach aimed at preserving stability and reliability in India’s payment and settlement systems.

India’s cheque clearing framework operates under the Cheque Truncation System (CTS), which replaces physical cheque movement with image-based processing. Introduced initially in 2010 and expanded nationwide by 2013, CTS has significantly improved efficiency, reduced costs, and strengthened fraud controls. Building on this foundation, RBI announced a transition to a continuous cheque clearing model through a circular dated 13 August 2025, with the objective of moving from batch-based clearing to near real-time settlement.

Under the new framework, cheque images are scanned and transmitted continuously during the business day instead of being processed in fixed sessions. Phase-1 of the rollout, effective from 4 October 2025 to 2 January 2026, allows banks to present cheques continuously, with a requirement to confirm or reject them by 7:00 PM on the same day. If confirmation is not provided by this deadline, the system treats the cheque as deemed approved for settlement. To support this, the RBI revised CTS timings, setting the presentation window from 9:00 AM to 3:00 PM and the confirmation window from 9:00 AM to 7:00 PM.