Major Update: India’s Cheque System Goes Real-Time from October 2025

Key Takeaways

Source: RBI

The Reserve Bank of India (RBI) has announced a game-changing transformation to India’s cheque clearing system that will dramatically reduce the time it takes for cheques to clear and money to reach your account.

Starting October 4, 2025, the current batch processing system for cheques will be replaced with continuous clearing and settlement on realisation, meaning cheques will be processed throughout the day instead of in fixed batches.

Implementation Timeline

The transition will occur in two phases:

• Phase 1: Begins on October 4, 2025.
• Phase 2: Commences on January 3, 2026.

Single Presentation Session and Continuous Delivery
Banks will operate a single presentation session from 10:00 AM to 4:00 PM. Cheques received at branches must be scanned and sent to the clearing house immediately and continuously during this session. The clearing house will release cheque images to drawee banks continuously.

Continuous Inward Processing and Confirmation
Drawee banks must confirm cheques in real-time during the confirmation session from 10:00 AM to 7:00 PM. Each cheque will have an Item Expiry Time, indicating the latest time for confirmation. Banks must generate either a positive confirmation (honoured cheque) or negative confirmation (dishonoured cheque) and send it to the clearing house immediately.

Time for Inward Processing

• Phase 1: All cheques must be confirmed by 7:00 PM. Any cheque not confirmed by then will be deemed approved and included in settlement.
• Phase 2: Cheques must be confirmed within 3 clear hours from receipt. For example, a cheque received at 10:30 AM must be confirmed by 1:30 PM. Unconfirmed cheques will be deemed approved after this period.
  

Settlement on Realisation

• Settlement will start at 11:00 AM and be updated hourly based on positive confirmations and deemed-approved cheques.

• No accounting entries will be made for cheques with negative confirmation.
  

Releasing Payments to Customers
After settlement, clearing houses will inform presenting banks about positive and negative confirmations. Banks are required to release payments to customers immediately, but no later than 1 hour after settlement, while following usual safeguards.

Key Benefits for Customers

1. Faster Access to Money

• Hourly settlements instead of daily batches
• Money credited within 1 hour of approval
• Significant reduction in cheque clearing time

2. Real-Time Processing

• Banks process cheques immediately upon receipt
• Continuous operation during business hours
• No more waiting for next batch processing cycle

3. Automatic Approval Feature

• If paying bank doesn’t respond within deadline, cheque is automatically approved
• Reduces delays due to processing backlogs
• Ensures money doesn’t get stuck unnecessarily

4. Extended Processing Hours

• Confirmation window: 10:00 AM to 7:00 PM
• More time for banks to process cheques
• Reduces chances of next-day processing

What This Means for India’s Payment Ecosystem

Modernization of Legacy Systems

This change represents India’s commitment to modernizing its financial infrastructure, bringing cheque clearing in line with the speed of digital payments.

Enhanced Financial Inclusion

Faster cheque clearing will particularly benefit:

• Small businesses relying on cheque payments
• Rural customers with limited digital payment access
• Traditional industries still using cheques

Competitive Edge

India’s cheque clearing system will become one of the fastest globally, processing cheques continuously rather than in batches.