New Delhi, August 20, 2025: In a major relief for millions of bank customers, the Reserve Bank of India (RBI) has announced a significant reform in the cheque clearing system. Starting October 4, 2025, cheques deposited in savings accounts will no longer take two to three days to clear. Instead, funds will be credited the same day, marking a major step towards faster banking transactions.
Until now, customers depositing cheques often faced a waiting period of up to three working days for clearance. This delay created inconvenience, particularly for traders and individuals dependent on steady cash flow. With the RBI’s new framework, cheque clearance will move to a real-time settlement model, drastically reducing waiting times.
The system has been formally named “Continuous Clearing and Settlement on Realisation” by the RBI. Under this process, once a cheque is deposited, it will be instantly scanned and sent to the clearing house. From there, it will undergo real-time processing, requiring the drawee bank to verify the payment promptly.
The rollout of this system will happen in two phases:
Phase 1 (October 4, 2025): Cheques deposited between 10 AM and 4 PM will be processed on the same day. Banks will need to confirm payment status by 7 PM. If no response is received from the issuing bank, the cheque will be automatically approved and settled on the same day.
Phase 2 (January 3, 2026): The process will become even faster. Cheques will need to be cleared within three hours of deposit, and once cleared, the amount will be credited to the customer’s account within one hour.
This two-step approach ensures both customers and banks can gradually adapt to the new system without operational disruption.
The biggest beneficiaries of this change are ordinary customers and businesses. Instead of waiting days to access their own funds, they will now receive money in their accounts within hours. This will be particularly helpful for small traders, shop owners, and service providers who rely heavily on daily liquidity to manage operations.
The faster process will also reduce financial stress for individuals awaiting urgent payments through cheques, such as salary disbursements, vendor settlements, or client payments.
While customers enjoy faster access to funds, banks will also gain significant advantages. Real-time cheque clearance reduces settlement risk—the risk of default during the waiting period. By accelerating the transaction cycle, banks can streamline their operations and improve overall system efficiency.
Moreover, quicker clearance means fewer disputes, smoother reconciliation, and increased trust in the banking system. For RBI, this reform is another step toward creating a digitally-driven, transparent, and secure banking environment in India.
With this initiative, the RBI is aligning India’s cheque clearing process with international best practices. At a time when digital payments are becoming increasingly popular, this move ensures that traditional instruments like cheques also keep pace with the need for speed and convenience.
For customers, it means no more waiting anxiously for days after depositing a cheque. For banks, it’s an opportunity to cut operational delays and risks. And for the Indian financial system, it is a bold step toward modernization.
