Under the RBI’s upcoming Cheque clearing system, silence from the payer’s bank means automatic approval
In a major shake up of Cheque processing, Reserve Bank Of India (RBI) has announced that Cheques will now be cleared within few hours instead of 1 or 2 working days. This new process, anchored in the ”continuous clearing” model under the Cheque Truncation System (CTS), will become effective from October 4, 2025.
What’s Changing?
As per the new rule, banks shall scan and submit images of cheques immediately upon their presentation. The transactions would then be settled rapidly with an “on-realization-settlement” process during banking hours. If there is no confirmation within three hours, Cheques will be auto approved for settlement. This represents a great shift from the past T+1 batch clearing cycle.
According to the Reserve Bank of India’s new cheque clearing system, the phrase “no confirmation” means that if the bank of the payer do not reply before the specified limit of three hours of receiving the image and detail of the cheque for verification. This will automatically consider silence as implied approval by the bank and it will proceed to clear the cheque if neither approval nor disapproval is received from the bank in that period. This regulation entails faster processing and avoids delays caused due to inaction by the payer’s bank. Simplified, as long as a bank fails to reply on time, that cheque will be cleared.
Why its matters
Faster Processing- Cheque clearance will now happen almost as fast as NEFT or RTGS.
Reduced Delays- People and businesses gain quicker access to funds.
Lower Risk- Faster settlement reduces potential financial and operational risks.
Better Customer experience- Faster, more reliable banking improves satisfaction.
The RBI will soon release detailed guidelines to help bank smoothly implement the new system