Banking: A major change in the banking system, checks will now be cleared quickly…money will arrive within an hour..

The Reserve Bank of India has amended its check clearance regulations. The new rule came into effect from October 4, 2025. Under the new rule, customer checks will now be cleared within a few hours, as opposed to the previous time of up to two days. The RBI stated that there will be a single presentation session, where checks must be presented between 10 a.m. and 4 p.m. The receiving bank will then scan the check and send it to the clearinghouse.

The clearinghouse will issue check images to the banks drawn on the check continuously, allowing for near-real-time settlement of each check, rather than the current T+1-day clearing cycle. Vivek Iyer, Partner and Head of Financial Services Risk at Grant Thornton India, said this move will ensure funds are credited within a few hours, providing customers with quick access to funds.

First Phase
This will particularly benefit regions where digital infrastructure is not yet fully developed. Banks' back-end technology has also been upgraded to facilitate a smooth transition to the new system. This has been implemented in two phases. The first phase will run from October 4, 2025, to January 2, 2026. During this period, banks receiving checks will be required to confirm them until the confirmation session ends. If a check is not confirmed within this time, it will be considered accepted and included for settlement. The item expiry time for all checks during this phase will be 7 pm.

The second phase, starting January 3, 2026, will change the item expiry time to T+3 hours. If a check is not confirmed within three hours, it will be considered accepted and included for settlement at 2 pm. Based on positive confirmations from banks and accepted checks, settlements will be issued hourly from 11 am until the end of the confirmation session. Presenting banks will process these settlements and, after the usual security checks, will disburse payments to customers within one hour of successful settlement. In FY25, 609.54 million transactions were processed under the Check Truncation System (CTS), with a total value of ₹71.13 trillion. In FY26, the value of transactions so far has reached ₹29.39 trillion.

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