RBI to transition control from the truncation system to “Continuous clearance with on-realization-settlement” in 2 phases

Bag per modalities for continuous clearing with on-realization settlement in CTS, there will be a single (check) presentation session from 10 a.m. to 4 p.m. Photocredit: Dhiraj Singh

The RBI has decided to switch the Check Truncation System (CTS) to “Continuous clearance with on-realization settlement” in two phases, with the first phase that starts on October 4, 2025 and the second on January 3, 2026.

This step is aimed at improving the efficiency of check -cleaning and reducing the risk of settlement for participants in the check -clearing system and to improve the customer experience.

That is why the CTS is transferred from the current approach of batch processing to continuous clearing with ‘on-realization-settlement’. CTS is currently processing the checks with a clearing cycle of up to two working days.

According to the modalities for continuous clearing with on-realization-settlement in CTS, there will be a single (check) presentation session from 10 a.m. to 4 p.m.

Checks received by the bank branches are immediately and continuously sent to the Clearing House during the presentation session. The Clearing House will in turn release the check images to pull sofas on continuously

The Draawee Banks confirmation session starts at 10 a.m. and closes at 7 p.m. For every check presented, the Drawee Bank generates either a positive confirmation (for honored checks) or negative confirmation (for unfair checks). The processing of checks by Drawee Banks must be performed continuously throughout the day and on a real -time basis as soon as check images are received.

From 11 am the settlement will be performed every hour until the end of the confirmation session, based on the positive confirmations received from Drawee benches and checks that are considered approved.

The presenting bank will process the information from positive and negative confirmations and immediately release the payment to the customers, but no later than 1 hour of a successful settlement, subject to usual guarantees.

More so

Published on August 13, 2025