The Reserve Bank of India has announced a major overhaul of the cheque truncation system, cutting clearance times from up to two working days to just a few hours.
The phased rollout, starting October 4, will bring near real-time cheque processing during business hours.
In Phase 1, from October 4, 2025 to January 2, 2026, banks will continuously scan cheques from 10 am to 4 pm. Drawee banks must confirm each cheque by 7 pm, either honouring or rejecting it. Miss the deadline, and the cheque gets automatically approved for settlement that night.
Phase 2 begins on January 3, 2026, when the deadlines tighten further. Cheques must be confirmed within three hours of receipt, with funds credited within an hour after settlement. For example, if a cheque reaches the drawee bank between 10 am and 11 pm, it must be confirmed by 2 pm. If there’s no response, it will be deemed approved and settled at 2 pm.
From October, depositing a cheque before 4 pm could mean it is confirmed or settled that same evening—provided the bank follows the process.
From January, the turnaround shrinks further, promising near real-time processing. According to RBI, every cheque will generate either a positive confirmation (for honoured cheques) or a negative one (for dishonoured cheques), sent immediately to the clearing house.