Easemoney News Desk, New Delhi – At the start of January 3, 2026, All Cheque payments all over india became faster than ever before. The Reserve Bank of India (RBI) has announced that all cheques presented between 10 AM and 4 PM must be either cleared or returned within three hours.
Not only this, but if a bank fails to respond within that time, the cheque will be automatically approved, and the funds will be credited to the customer’s account (beneficiary or receiver account) on the same day. It marks a major shift in banking cheque operations around the country, making payments a real-time process.
According to the Latest official RBI circular (RBI/2025-26/73 CO.DPSS.RLPD.No.S536/04-07-001/2025-26), this reform is part of the “Continuous Clearing and Settlement on Realisation” framework that aims to modernise the traditional cheque clearing system.
- Potential concerns – If the remitter’s account doesn’t have enough balance, the cheque may bounce, but the system might temporarily show a credit to the beneficiary.
- Why it’s considered safe – RBI is likely providing banks with liability safeguards in case of technical issues, but the beneficiary will still get funds automatically.
Why the RBI Made This Change
Until 4 October 2025, the cheque or check clearing in India worked on a batch-based system. Cheuqes were collected and processed in groups once or twice a day. That meant:
- The receiver had to wait one or two working days for funds to be credited. Even the sender put the cheque on time.
- Holidays and weekends often caused extra delays than usual.
- Most Businesses and individuals faced cash flow uncertainty. No confirmed timing.
- If a cheque was returned, people often found out only the next day.
Under the new rule, this delay will end. The RBI said in its 2025 policy note that continuous clearing will “reduce settlement risk and ensure faster fund availability to customers.”
Phase 1: The Foundation (October 4, 2025 – January 2, 2026)
The changes start from phase 1, during this phase, banks start scanning and transmitting cheques to the clearing house continuously between 10 AM and 4 PM, instead of in fixed batches.
- The Settlements occurred hourly starting at 11 AM, allowing faster fund movement.
- All banks had until 7 PM to confirm each cheque.
- Same rules start here; if they failed to respond by the deadline or end of the day, the cheque was automatically approved.
- Once the settlement was completed, funds were to be released within one hour to the customer.
In this phase, we can call it a test phase. It gives banks and the National Payments Corporation of India (NPCI) time to test the infrastructure and resolve technical issues before the real-time model is launched.
Phase 2: The Real-Time Leap (From January 3, 2026)
In phase 2, the confirmation process becomes time-bound for every individual cheque:
- Each cheque gets a three-hour window for clearness.
- Example – if your cheque is received at 10:30 AM, the bank must approve or return it by 1:30 PM.
- Funds must be credited to the customer’s account within one hour after settlement. The process feels like the same day, largely a 4-hour process.
The RBI Notes say, this change “reduces settlement risk, provides faster fund availability, and enhances customer confidence.”
As per Economic Times, the NPCI has confirmed that its national clearing network is “fully ready for continuous hourly settlements” after successful Phase 1 testing.
How This Differs from the Old System
| Old Cheque Clearing System | New Continuous Clearing System (from Jan 3, 2026) |
|---|---|
| Cheques cleared once or twice daily in batches. | Cheques processed continuously during banking hours |
| Clearing took 1–2 working days (sometimes more). | Cheques cleared or returned within 3 hours. |
| Funds credited next day (T+1). | Funds credited on the same day, often within hours. |
| Uncertainty about status until next day. | Customers get clarity in a few hours — pass or return. |
| Manual cut-off system. | Automated real-time system with hourly settlements. |
What This Means for Customers
- Same-day access to funds: Depositors will see credit within hours. No more delays for 2/3 days or higher.
- Less uncertainty: Cheques will either clear or return quickly.
- Better cash-flow planning: Especially helpful for small businesses and salaried individuals.
- Nationwide uniformity: All banks must follow the same three-hour rule.
- To get benefits – Deposit early in the day for faster clearance and same-day credit.
The RBI urges customers to maintain the required balance to avoid any instant cheque bounces, since there will be no overnight buffer.
Challenges for Banks
However, the new three-hour rule also increases pressure on banks.
- They must upgrade internal systems for continuous cheque scanning and image verification.
- Staff need to respond within tight windows to avoid automatic approvals.
- Rural branches may face connectivity challenges or delays in processing images.
In phase 1, most banks faced technical issues; however, it was fixed after NPCI’s Confirmation about teething troubles.
More news – RBI Approves Silver Loans from April 2026: Key Rules, LTV, and Process
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November 9, 2025
