Page Contents
Switch to Continuous Clearing (on‐realisation) : The current batch-wise settlement model for cheques will be replaced with a continuous clearing system. Rather than waiting for a fixed “cheque-clearance slot,” cheques presented during the day will be processed and confirmed in a rolling fashion. Settlement Time: 1 day after cheque presentation, Money Credited: Within 2 days
What is Positive Pay : A fraud-prevention system where cheque issuers (drawers) must pre-share cheque details (number, date, amount, payee) with the bank before it is presented. Drawer emails cheque details (in bank’s excel format) to the regional Positive Pay email ID. Bank verifies details, Confirmation of acceptance/rejection sent to drawer., In case of rejection (data mismatch/unregistered email), customer must resubmit details.
Under the Positive Pay. Cheques must be presented between defined hours (especially in Phase 1: 10 am to 4 pm) to avail of continuous clearing. Banks will need to upgrade infrastructure (scanning, image transmission, processing) to support continuous clearing. Dispute / rejection handling will become more time-sensitive. In some cases, fraud checks or exceptions may still cause delays beyond the ideal continuous window. Customers and institutions will need clarity on which cheques / branches will be covered initially, as not all branches or types may be enabled immediately. key Benefits of the above change are like Faster access to funds, Extended cheque presentation hours, Real-time settlement improves liquidity
Positive Pay Requirement & Applicability at Bank: Recommended for cheques above INR 50,000. Mandatory for cheques above INR 5,00,000. Only cheques with Positive Pay confirmation are protected under RBI’s dispute resolution mechanism. RBI’s Official Framework:
Phase 1 (Oct 4, 2025): Faster Confirmations/Settlement Windows: Clearing Method:Continuous clearing with real-time settlement Continuous clearing during the 10 am – 4 pm window, settlement on the same day.
Phase 2 (Jan 3, 2026): Later Phase (from 3 January 2026) : Clearing Method: Continuous clearing with real-time settlement
Hourly turnaround and near real-time settlements. The clearing turnaround will be narrowed further—for example, cheques deposited between 10:00–11:00 am must be cleared or rejected by 2:00 pm. Once settled, the presenting banks are expected to credit the beneficiary’s account within one hour, subject to standard checks. Money Credited: Within 1 hour of settlement Cheques deposited in each 1-hour slot will have to be cleared within a few hours. Example: Cheques deposited between 10:00–11:00 am must be cleared or returned by 2:00 pm. Once cleared, the beneficiary’s bank will have to credit funds within an hour.
Move cheque payments closer to NEFT/RTGS-like speed while retaining cheque usage safety. Always keep your account funded before issuing cheques (same-day debit will happen). Ensure correct cheque details (date, amount, signature, beneficiary). For cheques above INR 50,000 : register under Positive Pay to avoid rejections/delays. For cheques above INR 5,00,000 : Positive Pay is mandatory. Expect your payee to receive funds within hours instead of days.
| Aspect | Under Old System | New System (from 4 Oct 2025 / later) |
| Time taken for clearance | Often up to 1–2 working days | Within same day (hours) for many cheques |
| Confirmation window | Batch processing (fixed windows) | Rolling / continuous during business hours |
| Auto fallback | Not common | If no response by deadline, auto-approval may kick in |
| Final settlement & credit to payee | After batch settlement cycles | Faster credit (within an hour in later phase) |
| Scope of deposit times | Only at cut-offs / batch windows | Cheques during 10 am – 4 pm band will be eligible for continuous processing |
Overview on Tax Treatment on Gratuity in India What is Gratuity? Gratuity is a lump sum paid by an employer… Read More
Taxation Comparison: Gold Coin vs Gold Jewellery Tax Aspect Gold Coin Gold Jewellery ITR Reporting Treated as a capital asset.… Read More
Crypto Taxation & ITR Reporting Guide Tax on Profits from Crypto (Virtual Digital Assets)- Taxation U/s 115BBH Applicability on Virtual… Read More
Savings Account – Rules for Transactions to Avoid Income Tax Scrutiny The Income Tax Department monitors high-value transactions through banks’… Read More
Quick Guide on GST Marginal Scheme What is GST Marginal Scheme Meaning : The GST Margin Scheme is applicable primarily… Read More
Reasons to Choose Health Insurance for Your Parents Caring for one’s parents often involves ensuring their health and well-being, particularly… Read More