The Reserve Bank of India has taken an important decision regarding customers and banks making check payments. The RBI has decided not to implement the new system, which required banks to accept or reject checks within just three hours of receiving them. This system was scheduled to begin on January 3, 2026, but has now been postponed until further notice.
This decision clearly indicates that the RBI wants to make the check clearance system fully practical and technically robust rather than rushing it into implementation. For now, the existing process will continue across the country.
What did the RBI want to change?
The Reserve Bank has long been working towards making check clearance faster, secure, and digital. To this end, the Continuous Clearing and Settlement (CCS) framework was introduced. Its objective was to move check clearance from a batch-based process to a near-real-time system.
Phase 2 of the CCS framework was considered the most important. After its implementation, once a bank receives a digital image of a check, it has only three hours to approve or reject it. If no response is received within the stipulated time, the check is automatically considered cleared.
Why was CCS Phase 2 postponed?
In a circular issued on December 24, the RBI clarified that Phase 2 of the CCS framework is being postponed for the time being. Although the Reserve Bank has not publicly shared any specific reason for this, banking sources believe that many banks were not yet fully prepared for this change.
The RBI has taken this step due to issues such as technical infrastructure upgrades, software integration, employee training, and operational risks. The central bank has also clarified that until a new date is announced, only the first phase of CCS will remain in effect.
How is the check clearance process currently being carried out?
Currently, check clearance in the country is being done through the Check Truncation System (CTS). Under this system, there’s no need to send checks back and forth between banks. Only the digital image of the check and its associated electronic data are sent to the clearing house.
As soon as the drawee bank receives the check image, it examines it and sends an approval or rejection electronically. This has significantly sped up the clearance process compared to the previous one.
What improvements have been made in check processing times?
The RBI has also changed check processing hours. Customers can now deposit checks from 9 a.m. to 3 p.m. Banks can decide whether to accept or reject checks from 9 a.m. to 7 p.m.
The advantage of this change is that in many cases, customers will have the convenience of same-day check clearance, which was previously impossible.
How will the postponement of Phase 2 affect the general public?
The postponement of CCS Phase 2 simply means that the mandatory three-hour check clearance time will no longer be applicable. This means that checks may take a little longer to clear. However, the current system is faster and more digital than ever before, so ordinary customers won’t face any major inconvenience. Until banks are fully technologically prepared, this RBI decision is considered to be in the best interest of both customers and banks.