RBI has announced a transition for the Cheque Truncation System (CTS) from its current batch processing model to a new “continuous clearing with settlement on realisation” system, to be implemented in two phases. Under the new system, there will be a single, continuous presentation session from 10:00 AM to 4:00 PM, during which banks will send scanned cheque images to the clearing house. Drawee banks will then have a continuous confirmation session from 10:00 AM to 7:00 PM to process and confirm or dishonour cheques. The new rules specify an “Item Expiry Time” for each cheque, i.e. if confirmation is not provided by the drawee bank within this time, the cheque will be considered approved. Settlement will now occur hourly, from 11:00 AM onwards, based on positive confirmations. Presenting banks are then required to release funds to customers within one hour of successful settlement.