In this digital age, banking services still experience a delay in the clearance of cheques, which currently takes two days.
No more waiting for days for cheque clearance. The Reserve Bank of India (RBI) has introduced a new check-clearing mechanism to speed up financial transactions in the country.
During the release of the RBI’s monetary policy review decisions, RBI Governor Shaktikanta Das announced a significant change in the cheque clearance process, aiming to enable cheque clearance within a few hours.
Governor Das mentioned the implementation of a T+1 system for cheque clearance and stated the intention to reduce the time frame to a few hours.
The current Cheque Truncation System (CTS) will undergo changes to adopt the ‘on realization settlement’ system, replacing the batch-wise processing method.
This means cheques must be scanned, presented, and passed within a few hours during the bank’s working hours to expedite the clearance process.
This process is expected to align Cheque clearing with other faster payment methods such as National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), and Immediate Payment Service (IMPS).
Governor Das confirmed that comprehensive guidelines will be issued soon and emphasized that this decision aims to improve the overall banking experience for customers.
Additionally, the RBI, as part of the Monetary Policy Committee (MPC), has maintained stable interest rates and also increased the existing limit for tax payments through UPI from Rs. 1 lakh to Rs. 5 lakh.