Banks will transition to a continuous cheque clearing system from the fixed batch format starting October 4, a move which will enhance customer convenience, industry experts said.
Under the new system, cheques will no longer be processed in fixed batches. Instead, cheques received at bank branches will be scanned and sent to the clearing house continuously during the presentation session, from 10 am to 4 pm.
The clearing house will release cheque images to drawee banks on a continuous basis, allowing each cheque to be settled on a near real-time basis, instead of following the current T+1-day clearing cycle.
Vivek Iyer, partner and financial services risk leader at Grant Thornton Bharat, said: "This move will ensure funds are credited within a few hours, giving customers quicker access to funds. It will particularly benefit areas where digital infrastructure is still evolving. Banks' back-end technologies have also advanced to ensure a smooth transition."
The implementation will be phased. Phase 1 will run from October 4, 2025, to January 2, 2026, during which drawee banks must confirm cheques presented to them by the end of the confirmation session. Cheques not confirmed within this time will be deemed approved and included for settlement. The item expiry time for all cheques in this phase will be 7 pm.
Phase 2 will begin on January 3, with the item expiry time for cheques changing to T+3 hours. Cheques not confirmed by drawee banks within three hours will be treated as deemed approved and included for settlement at 2 pm.
Settlements will be released every hour from 11 am until the end of the session, based on positive confirmations from drawee banks and cheques considered deemed approved. Presenting banks will process these and release payments within one hour of successful settlement.
Under the cheque truncation system, the value of transactions in FY25 was Rs 71.13 trillion, with a volume of 609.54 million. The value is Rs 29.39 trillion so far in FY26.
-- Aathira Varier, Business Standard
