Starting Saturday, banks in India will shift from the current batch-based cheque clearing system to a continuous process, a move aimed at speeding up settlements and improving customer convenience.
Under the new mechanism, cheques received at bank branches will be scanned and sent to the clearing house on a rolling basis during the presentation window, which will remain open from 10 am to 4 pm. The clearing house will then release cheque images to drawee banks in real time, enabling near-instant processing compared to the present T+1 day cycle.
A drawee bank refers to the bank where the cheque issuer maintains their account.
Vivek Iyer, Partner and Financial Services Risk Leader at Grant Thornton Bharat, noted that the change will ensure funds are credited within hours. “This will give customers faster access to money and benefit areas with limited digital infrastructure. Banks’ back-end systems have also been upgraded to support the transition,” he said.
The rollout will happen in two phases. In Phase 1, from October 4, 2025, to January 2, 2026, drawee banks must confirm cheques by the end of the confirmation session. Unconfirmed cheques will be deemed approved and processed for settlement, with an expiry time of 7 pm.
Phase 2 will begin on January 3, 2026, when the expiry time will change to T+3 hours. Cheques not confirmed within three hours will automatically be deemed approved and settled at 2 pm.
Hourly settlements will take place between 11 am and the end of the confirmation session. Presenting banks must credit customers within one hour of settlement, subject to standard safeguards.
In FY25, transactions under the Cheque Truncation System (CTS) amounted to ₹71.13 trillion across 609.54 million cheques. In FY26 so far, transactions worth ₹29.39 trillion have already been processed.