RBI to Roll Out Continuous Cheque Clearing in Two Phases From Oct 2025

Circular No. RBI/2025-26/73 CO.DPSS.RLPD.No.S536/04-07-001/2025-2026; Dated: 13.08.2025

RBI’s Transition to Continuous Cheque Clearing

The Reserve Bank of India (RBI) had earlier announced a significant reform in the Cheque Truncation System (CTS), shifting from the current batch processing model to a continuous clearing system. This transition aims to enhance efficiency and ensure quicker settlement of cheques, aligning with the broader objective of modernising payment systems in India.

Phased Implementation Plan

To ensure a smooth transition, the RBI has decided to roll out the new system in two phases. Phase 1 of the continuous clearing mechanism will be implemented on October 4, 2025, while Phase 2 will be launched on January 3, 2026. This staggered approach allows banks and clearing institutions sufficient time to adjust their internal processes and infrastructure.

Impact on Settlement and Realisation

Under the new system, cheque settlement will no longer be restricted to batch timings. Instead, it will occur on a real-time basis upon realisation, significantly reducing delays for customers. This improvement is expected to enhance customer confidence in cheque-based transactions while also promoting faster fund availability across the banking system.

Advisory to Banks and Customers

The RBI has advised all banks to proactively inform customers about the upcoming changes in the cheque clearing process. Clear communication will be essential to avoid confusion and ensure that customers understand the revised settlement timelines. Banks are expected to use multiple channels, including SMS, email, and branch notices, to spread awareness before the phased implementation.

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