RBI Update: Big news for those who pay by cheque, RBI has changed its plan...
The Reserve Bank of India (RBI) has taken an important decision regarding people who make payments by check. The RBI has temporarily postponed the implementation of the new system under which banks were required to clear or reject cheques within just three hours of receiving them. This system was scheduled to be implemented from January 3, 2026, but it has now been put on hold until further notice.
What was the RBI's new plan?
The RBI aims to make the check-clearing process in the country faster and more modern. With this objective, it had announced the Continuous Clearing and Settlement (CCS) framework. Phase 2 of this framework was considered the most important, as it significantly reduced the cheque-clearing time.
Under Phase 2, as soon as a bank received the digital image of a check, it had only three hours to accept or reject it. If the bank did not respond within this stipulated time, the cheque would be considered automatically cleared.
Why did the RBI suddenly put the brakes on?
In a circular issued on December 24, the RBI stated that Phase 2 of the CCS framework has been temporarily postponed. Although no single reason has been publicly given, it is believed that the decision was taken considering the banks' technical preparedness, system upgrades, and operational challenges. The RBI has clarified that until a new date is announced, the existing system, i.e., Phase 1, will continue as before.
How is check clearing done currently?
Phase 1 was implemented at the beginning of this year. Under this system, the physical movement of checks has been eliminated through the cheque Truncation System (CTS). Now, clearing is done through digital images and electronic data of the cheques, making the process faster than before.
Banks no longer wait for a fixed batch during the day; as soon as a cheque is received, its image is sent to the clearing house. The drawee bank examines the image and sends approval or rejection electronically.
What changes have been made to check processing time?
The RBI has also changed the working hours for check processing. The window for depositing cheques will now be open from 9 AM to 3 PM. Meanwhile, banks can confirm or reject cheques between 9 AM and 7 PM. This increases the likelihood of checks being cleared on the same day.
Impact of the Phase 2 postponement on the general public
The postponement of Phase 2 means that the strict three-hour time limit for check clearing will not be implemented for now. This means that it may still take some time for checks to be processed. However, the current system is much faster than before, so customers will not face any major difficulties.
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