The Reserve Bank of India (RBI) on Thursday announced the reduction in time taken to cheque clearance from days to hours.
Photo: Reserve Bank of India (IANS)
The Reserve Bank of India (RBI) on Thursday announced the reduction in time taken to cheque clearance from days to hours.
Governor Shaktikanta Das said the clearing cycle of the cheque will be reduced from the present T+1 days to a few hours.
“To improve the efficiency of cheque clearing and reduce settlement risk for participants, and to enhance customer experience, it is proposed to transition CTS from the current approach of batch processing to continuous clearing with on-realisation-settlement,” the RBI Governor said while announcing the deliberation of the Monetary Policy Committee (MPC) meet.
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As per the current arrangement, the Cheque Truncation System (CTS) currently processes cheques with a clearing cycle of up to two working days.
Under the new arrangement, the cheques will be scanned, presented, and passed in a few hours and on a continuous basis during business hours.
The clearing cycle will reduce from the present T+1 days to a few hours. Detailed guidelines in this regard shall be issued shortly, governor said.
Cheque Truncation System is the process of stopping the flow of the physical cheque issued by a drawer at some point by the presenting bank en-route to the paying bank branch.
It obviates the need to move the physical instruments across bank branches, other than in exceptional circumstances for clearing purposes.
In its place an electronic image of the cheque is transmitted to the paying branch through the clearing house, along with relevant information like data on the MICR band, date of presentation, presenting bank, etc.
The MPC decided with a majority of 4:2 members decided to keep the policy rate unchanged at 6.5%.
Members decided to remain focussed on withdrawal of accommodation on to ensure inflation progressively aligns to the target while supporting growth.
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