Big news for those paying by cheque, RBI changes plan
Important news has emerged for those who transact by check. The RBI has changed its check clearance plans. Consequently, the new system that was expected to speed up cash transfers has been put on hold.
The Reserve Bank of India has made an important decision regarding people making payments by check. The RBI has postponed the introduction of a new system that required banks to pass or reject checks within just three hours of receiving them. This system was scheduled to be implemented on January 3, 2026, but has now been put on hold until further notice.
What was RBI's new plan?
The RBI wants to speed up and modernize the check clearance process in the country. To this end, it announced the Continuous Clearing and Settlement (CCS) framework. Its second phase, or Phase 2, was considered the most important, as it would significantly reduce check clearance times.
Under Phase 2, once a bank receives a digital image of a check, it has only three hours to accept or reject it. If the bank fails to respond within this timeframe, the check is automatically considered cleared.
Why did RBI suddenly apply the brakes?
In a circular issued on December 24, the RBI stated that Phase 2 of the CCS framework has been postponed. While no specific reason has been publicly stated, it is believed that this decision was made considering banks' technical readiness, system upgrades, and operational challenges. The RBI clarified that until a new date is announced, the existing system, i.e., Phase 1, will continue as before.
How is check clearance happening now?
Phase 1 was implemented earlier this year. Under this system, the physical movement of checks has been eliminated through the Check Truncation System (CTS). Checks are now cleared using digital images and electronic data, making the process faster.
Banks no longer wait for a fixed batch of checks during the day; as soon as a check is received, its image is sent to the clearinghouse. The drawee bank reviews the image, makes a decision, and sends an approval or rejection electronically.
What changes have happened in check processing time?
The RBI has also changed the working hours for check processing. The check deposit window will now be open from 9:00 AM to 3:00 PM. Banks can confirm or reject checks from 9:00 AM to 7:00 PM. This increases customers' chances of same-day check clearance.
The impact of the postponement of Phase 2 on the common people
The postponement of Phase 2 means that the strict three-hour check clearance time limit will no longer be enforced. This means that checks may still take longer to clear. However, the current system is much faster than before, so customers won't experience significant inconvenience.
Reserve Bank of India