Cheque Clearing Time To Reduce To A Few Hours: RBI
This is a significant improvement over the previous system where there was a delay of one or two working days for the funds to be transferred
Going ahead, cheques will be cleared, sooner, in a matter of a few hours.
According to the Reserve Bank of India (RBI) Governor’s statement at the latest monetary policy meet (MPC), at present, cheque clearing through Cheque Truncation System (CTS) operates in a batch processing mode and has a clearing cycle of up to two working days. It is proposed to reduce the clearing cycle by introducing continuous clearing with 'on-realisation-settlement’ in CTS.
This means that cheques will be cleared within a few hours on the day of presentation. This will speed up cheque payments and benefit both the payer and the payee.
A cheque truncation system is an electronic process that replaces the physical movement of cheques. It involves capturing cheque images and data digitally, which are then transmitted electronically between banks for clearing and settlement. This system speeds up cheque clearing and reduces costs.
On-realisation settlement in CTS means that the funds for a cleared cheque will be available to the beneficiary bank almost immediately upon the cheque being processed and verified. This is a significant improvement over the previous system where there was a delay of one or two working days for the funds to be transferred.
