Cheque Clearing Cycle Reduce From The Present T+1 Days to a few hours : RBI
After announcing the establishment of a new cheque clearance mechanism, the Reserve Bank of India is trying to facilitate the payment system with a marked improvement in the speed of cheque-based transactions. The reduction in clearing time will lead to faster crediting of funds.
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With the announcement of the new cheque
Clearance Mechanism The Reserve Bank of India has stated that the clearance of checks will be expedited within a few hours. Currently, the process of check clearance takes approximately two to three days. This announcement was made by the governor of the Reserve Bank of India during the Monetary Policy Committee meeting.
The Cheque Truncation System (CTS) clearing process runs in batch mode and can take up to two working days to complete.
“Cheque Truncation System (CTS) currently processes checks with a clearing cycle of up to two working days. To improve the efficiency of check clearing, reduce settlement risk for participants, and enhance the customer experience, it is proposed to transition CTS from the current approach of batch processing to continuous clearing with ‘on-realisation settlement’. Cheques will be scanned, presented, and passed in a few hours and on a continuous basis during business hours. The clearing cycle will reduce from the present T+1 days to a few hours,” said a RBI press release.
The RBI will issue detailed guidelines on this new system soon, further clarifying how the transition will be implemented.
Governor Das highlighted that the new system is designed to streamline the check-clearing process, addressing a long-standing issue of delays in fund transfers and improving overall transaction efficiency.
However, RBI always tries to facilitate the payment system. In this way, a cheque clearance mechanism has been introduced to augment customer safety in cheque payments and reduce instances of fraud occurring on account of the tampering of cheque leaves.