New update for NRIs in UAE: Cheques in India to clear quicker from October 4

Dubai: UAE-based Indian expats depositing cheques into their Indian bank accounts will soon see a major improvement in how quickly their money becomes available.

Starting October 4, 2025, the Reserve Bank of India (RBI) will roll out a new system that reduces cheque clearance times from several days to just a few hours.

The RBI announced last month that its Cheque Truncation System (CTS) will move away from batch-based clearing to a continuous settlement model. This means cheques will be processed throughout the day rather than at fixed intervals, cutting delays and providing customers with faster access to funds.

What’s changing

• Continuous processing: Cheques will now be scanned, presented, and cleared between 10:00 AM and 4:00 PM, instead of waiting for pre-set clearing cycles.

• Same-day confirmation: Banks will be required to confirm whether a cheque is honoured or declined by 7:00 PM on the same day. If no action is taken, the cheque will be treated as cleared automatically.

• Phase 2 update: From January 3, 2026, the confirmation window will shrink to just three hours. Banks must respond within that timeframe, making cheque clearance even faster and more predictable.

• Quick crediting: Once settlement is complete, banks must credit the cleared funds to the customer’s account within one hour, subject to standard fraud and compliance checks.

What this means for UAE expats

For Indian expats in the UAE, many of whom maintain NRE (Non-Resident External) and NRO (Non-Resident Ordinary) accounts, the new rules are particularly significant.

• Cheque deposits that used to take one to two working days will now clear within hours, depending on the time of submission.

• This will make it easier for families in India to access funds quickly, especially when dealing with large payments such as tuition fees, property transactions, or medical bills.

• For expats sending cheques to India, the process will become smoother and more predictable, helping with better financial planning across borders.

Why the RBI is making this change

The move is part of the RBI’s wider push to modernise India’s banking infrastructure and align with global best practices.

The regulator said growing cheque volumes and customer demand for faster turnaround required a system that reduces risks of delay and ensures greater transparency.

For millions of Indian account holders abroad, including those in the UAE, this upgrade promises both speed and certainty — turning cheque clearing from a matter of days into a matter of hours.