RBI to implement faster cheque clearance system, settlement in hours

The settlement of cheques will now be done in a few hours. The Reserve Bank of India (RBI) has announced steps to reduce the time taken in cheque clearance to a few hours and reduce the associated risk. Currently, it takes two days from the time of depositing the cheque to the receipt of the amount. But in the new system, cheques will be 'cleared' within a few hours of depositing.

Announcing the third monetary policy review of the current financial year on Thursday, RBI Governor Shaktikanta Das said, "It is proposed to change the current process of the Cheque Truncation System (CTS) to improve cheque clearance, reduce settlement risk, and provide better services to customers." He mentioned that under this, instead of processing in 'batches' under the current CTS system, clearing will be arranged continuously during business hours.

According to the RBI, "In the new system, the cheque will be 'scanned', presented, and cleared within a few hours. This will make cheque clearing much faster, whereas currently, it takes up to two days (T+1)."

Das said that detailed guidelines in this regard will be issued soon. Additionally, the RBI has proposed that banks report to credit information companies about their customers every fortnight, instead of the current monthly reporting.