From October 4, banks will be clearing cheques the same day, as required by the Reserve Bank of India's updated settlement framework that aims to speed up cheque settlement and enhance payment security.

Faster, safer?

At present, cheque clearance through Cheque Truncation System (CTS) works in a batch-processing mode.

Banks have announced that cheques deposited from October 4 will be cleared within a few hours on the same working day.

The banks will scan and send images of cheques and the Magnetic Ink Character Recognition (MICR) data to the clearing house. The clearing house will forward these images to the bank that needs to pay (the drawee bank) throughout the day.

Longer confirmation window

Once the drawee bank gets the image of the cheque, it has to act fast. The confirmation wi

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