The Reserve Bank of India (RBI) has postponed the second phase of its Faster Cheque Clearance initiative, which was scheduled to come into effect on January 3, 2026. Under Phase 2, banks were required to approve or reject a cheque within three hours of receiving its image. This delay means that, for now, customers cannot expect their cheques to clear within three hours.
According to RBI, the Continuous Clearing and Settlement (CCS) framework under Phase 2 requires operational readiness and review of certain system-level processes. The central bank noted that:
Phase 2 would have put significant time pressure on banks, as they would need to process cheques within three hours.
If a bank failed to respond within this period, the cheque would automatically be considered approved and settled.
RBI has decided to defer Phase 2 until further orders to ensure smooth implementation.
Phase 1 of the Faster Cheque Clearance system, implemented on October 4, 2025, will continue as is. Key features of Phase 1 include:
Traditional batch clearing has been replaced with a single, continuous presentation window.
Banks can scan cheque images and MICR data and send them to clearing houses immediately, rather than waiting for pre-set batch timings.
Phase 1 already sped up cheque processing compared to the old system.
RBI has also updated the working hours for cheque processing:
Presentation Window: 9 AM to 3 PM – when cheques can be presented to clearing houses.
Approval/Rejection Window: 9 AM to 7 PM – banks can approve or reject cheques.
If the drawee bank fails to respond within this window, the cheque is automatically considered approved and settled.
The goal of Phase 2 was to further accelerate cheque clearance:
Banks would have to make a decision within three hours of receiving a cheque image.
This would have allowed customers to receive funds faster and improved the speed and efficiency of the banking system.
Phase 2 was designed to make banks more agile technologically and operationally.
For now, the cheque clearance process remains under Phase 1, and customers cannot expect three-hour clearance starting January 2026. RBI will issue further instructions regarding Phase 2 implementation after reviewing operational readiness.
Customers should continue using Phase 1 services and note that cheques will be cleared faster than the old batch system, but not within the promised three-hour window yet.
