The Reserve Bank of India has taken an important decision regarding people making payments through cheques. The RBI has currently postponed the introduction of the new system, under which banks had to pass or reject checks within just three hours of receiving them. The system was supposed to come into effect from January 3, 2026, but has now been postponed till further notice.
What was RBI’s new plan?
RBI wants to speed up and modernize the check clearance process in the country. For this purpose, it announced the Continuous Clearing and Settlement i.e. CCS Framework. Its second phase i.e. Phase 2 was considered to be the most important, as it would significantly reduce check clearance time.
Under Phase 2, as soon as the bank receives the digital image of the cheque, it will have only three hours to accept or reject the cheque. If the bank does not respond within this stipulated time, the check is automatically considered cleared.
Why did RBI suddenly put the brakes on?
In a circular issued on December 24, the RBI said that the second phase of the CCS framework has been sufficiently postponed for now. Although no single reason behind this has been made public, it is believed that the decision has been taken keeping in mind the banks’ technical readiness, system upgrades and operational challenges. The RBI has clarified that the current system i.e. Phase 1 will continue as before until the new date is announced.
How does check clearance work now?
Phase 1 was implemented earlier this year. Under this, physical movement of checks is eliminated through check truncation system i.e. CTS. Now the checks are cleared through digital image and electronic data, making the process faster than before.
No longer do banks wait for scheduled batches during the day, the image of a check is sent to the clearing house as soon as it is received. The drawing bank takes a decision after viewing the image and sends an approval or rejection electronically.
What has changed in check processing times?
RBI has also changed the working hours of check processing. Now the check deposit window will be open from 9 am to 3 pm. At the same time, banks can confirm or reject checks from 9 am to 7 pm. This increases the chances of customers getting their checks cleared on the same day.
Impact of Phase 2 postponement on general public
The postponement of Phase 2 means that the strict three-hour time limit for check clearance at present will not apply. This means that the check may take some time to clear. However, the current system is faster than before, so customers will not face much hassle.