Real-Time Cheque Clearance System by RBI

The Reserve Bank of India (RBI) has introduced a new real-time cheque clearance system to enhance efficiency, replacing the traditional batch-based process. The goal is to enable same-day clearance, allowing funds to be credited within hours rather than 1-2 business days.

Challenges Encountered

• There are significant glitches with the new system, including: 
  • Delays due to bank staff not being adequately trained to handle the new processes.
  • Technical integration issues leading to problems with cheque scanning and processing.
• Most banks face challenges such as: 
  • Poor cheque image quality.
  • Inconsistent scanning procedures.
  • Inadequate staff training causing scanned cheques to be rejected or processed using older schedules.

Operational Adjustments

• RBI extended the cheque clearing time until 11 pm to ease the transition, beyond the usual cutoff at 7.00 pm.

Impacts on Customers and Institutions

• Non-Banking Financial Companies (NBFCs) and other customers reported delays in receiving payments despite funds being debited from customer accounts.
• A large number of customers have adapted to online payment methods, such as: 
  • Corporates using National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS).
  • Retail customers in cities using the Unified Payment Interface (UPI).
• Cheque clearance data shows: 
  • A decline from 450 million cheques monthly in the pre-Covid period of 2019 to 200-300 million monthly since 2020.

Public Feedback

• Customers expressed dissatisfaction on social media over delays, with cases reported where cheques remain uncleared for days.