RBI to reduce cheque clearing cycle from T+1 to a few hours

Reserve Bank of India

The Reserve Bank of India (RBI) has proposed to reduce the cheque clearing cycle from T+1 days to within a few hours, Governor Shaktikanta Das said during the MPC statement on August 8.

“The clearing cycle will reduce from the present T+1 days to a few hours,” RBI said.

The Reserve Bank said to improve the efficiency of cheque clearing and reduce settlement risk for participants, and also to enhance customer experience, it proposes to transition CTS from the current approach of batch processing to continuous clearing, with 'on-realisation-settlement'.

Cheque Truncation System (CTS) currently processes cheques with a clearing cycle of up to two working days.

Cheques will be scanned, presented, and passed in a few hours and on a continuous basis during business hours, RBI added.

In line with the broader market expectations, the RBI’s Monetary Policy Committee (MPC) decided to keep the benchmark repo rate unchanged at 6.5 percent on August 8.

The MPC also kept the stance unchanged, staying focussed on 'withdrawal of accommodation'. The decisions were taken with a majority of 4:2 by the six-member rate-setting panel. Read other highlights here.

The standing deposit facility (SDF) rate has remained unchanged at 6.25 percent and marginal standing facility stays at 6.7 percent. The bank rate too was maintained at 6.7 percent. “There is a good amount of convergence in RBI policy and market expectation,” RBI Governor Shaktikanta Das said during his MPC statement.