RBI puts Phase 2 of Cheque Truncation System on hold

The decision follows operational issues faced during the rollout of Phase 1.

The Reserve Bank of India (RBI) has deferred the implementation of Phase 2 of Continuous Clearing and Settlement on Realisation under the Cheque Truncation System (CTS) until further directions. The move is aimed at allowing banks additional time to stabilise and fine-tune their processes.

Phase 2 was originally scheduled to come into effect from January 3, 2026. However, the RBI cited challenges experienced during Phase 1 as the primary reason for the postponement.

After the introduction of the same-day cheque clearance facility on October 4, 2025, several banks, businesses, and individual customers reported delays in cheque realisation, highlighting system and operational glitches.

Under Phase 2, the item expiry time for cheques was proposed to be revised to T+3 clear hours. For instance, cheques received by the drawee bank between 10 am and 11 am would be required to be either positively or negatively confirmed by 2 pm, i.e., within three hours from the cut-off time.

If no confirmation is received from the drawee bank within the stipulated three-hour window, the cheque would be deemed approved and automatically included in the 2 pm settlement cycle.

Additionally, in its latest circular to banks, the RBI announced revisions in session timings. The presentation session has been rescheduled to 9 am to 3 pm, instead of the earlier proposed 10 am to 4 pm, while the confirmation session timing has been adjusted to 9 am to 7 pm, from the previously envisaged 10 am to 7 pm as mentioned in the August 2025 circular.