Banks to clear cheques on same day from Oct 4 over RBI guidelines

New Delhi, Oct 3
Private banks, including HDFC Bank and ICICI Bank, have informed that they will start same-day cheque clearance from October 4, following the Reserve Bank of India's (RBI) updated settlement framework for quicker and more secure payments.

Cheques deposited from October 4 will be cleared within a few hours on the same day under the new system. Both banks have urged customers to keep adequate balances to prevent cheque bounce and to ensure all cheque details are accurately filled to avoid delays or rejections.

Customers are also urged by the banks to use the Positive Pay System to enhance security, requiring prior submission of key cheque details for verification. Account holders must provide the account number, cheque number, date, amount, and beneficiary name to the bank at least 24 working hours prior to depositing cheques exceeding Rs 50,000.

Banks will verify these details upon cheque presentation. Cheques will be cleared if the information matches; otherwise, the request will be rejected, and the drawer must resubmit the details.

Customers are required to email cheque details to specific regional addresses. Banks will send an acknowledgement message upon receipt before processing.

The Cheque Truncation System (CTS), which sends an electronic image of the cheque and its details to the drawee bank, is currently used by banks. This removes the need for cheques to be physically transferred, but when deposited in drop boxes or automated teller machines, settlement usually takes two working days.

Further, the RBI has made Positive Pay mandatory for cheques above Rs 5 lakh, while it is strongly recommended for those above Rs 50,000. Cheques validated under Positive Pay are also protected under the RBI’s dispute resolution system.

The RBI had announced that Phase 1 of continuous clearing and settlement will begin on October 4, 2025, and Phase 2 will begin on January 3, 2026.

Customers are advised to ensure all cheque details are accurate to avoid rejection. The amount in words and figures must match, the date must be valid, and there should be no overwriting in the payee’s name or amount. The drawer’s signature must also match the bank’s records.