What Is On-Realisation Settlement Proposed by RBI’s MPC?

Posted on Thursday, March 20th, 2025 | By IndusInd Bank

The Reserve Bank of India (RBI), through its Monetary Policy Committee (MPC), has proposed a major shift in cheque clearance called On-Realisation Settlement. This new system aims to reduce cheque clearing time. This will make funds available within hours instead of the traditional two to three days. This initiative will not only make financial transactions more efficient but also aligns India’s banking practices with global standards.

Understanding On-Realisation Settlement

On-Realisation Settlement is a proposed overhaul of the current cheque clearing process. Today, cheque clearance can take up to two days due to manual and semi-automated processes. The new system is called Cheque Truncation System (CTS) and it will leverage technology such as cheque imaging and Magnetic Ink Character Recognition (MICR). The cheque images and MICR data would be captured at the collecting bank and sent to the receiving bank. This eliminates actual cheque movement and reduces the timeframe to just a few hours.

The key to this new system is real-time data exchange between banks. Once a cheque is deposited, the funds could be credited to the payee’s account on the same day, provided the cheque is verified and cleared by the bank.

Impact on Consumers

Consumers stand to gain significantly from the On-Realisation Settlement system. This proposed change brings a host of benefits that will impact various aspects of personal and financial management. Below are the key ways consumers will benefit:

1. Faster Access to Funds

The most immediate benefit for consumers is quicker access to their funds. Whether it’s a salary, dividend, or payment from another source, the reduced clearance time means that consumers no longer have to wait two to three days to access their money. This is particularly beneficial in cases where the funds are urgently needed, as the new system allows for same-day clearance.

2. Improved Financial Planning

With funds becoming available more quickly, consumers can manage their finances with greater precision. This is especially important for those who rely on timely payments to meet financial obligations such as rent, bills, or loan repayments. Faster cheque clearance means that consumers can avoid delays and penalties associated with late payments, contributing to better financial stability and planning.

3. Increased Financial Agility

On-Realisation Settlement will enhance consumers’ financial agility, allowing them to react swiftly to financial opportunities or needs. Whether it’s seizing a time-sensitive investment opportunity or covering unexpected expenses, having access to funds on the same day can make a significant difference. This agility is crucial in today’s fast-paced financial environment, where opportunities and challenges can arise suddenly.

4. Enhanced Security and Reduced Fraud Risk

By reducing the time cheques are in the clearance process, On-Realisation Settlement also reduces the window of opportunity for fraudulent activities. With the implementation of advanced digital verification methods, consumers can have greater confidence in the safety of their transactions.

5. Better Customer Experience

The efficiency of On-Realisation Settlement translates into an improved customer experience. Consumers will likely find the banking process more convenient and reliable, with fewer delays and complications. This smoother experience can enhance the overall perception of banking services and foster greater trust between consumers and financial institutions.

If you are looking for a flexible banking experience to go along with the proposed faster cheque clearances, IndusInd Bank has a great option for you.

Indus Delite Zero Balance Savings Account: A Strategic Choice

Here’s why the Indus Delite Zero Balance Savings Account is an excellent choice.

Key Features of the Indus Delite Zero Balance Savings Account:

• No Minimum Balance Requirement: This account offers the flexibility to maintain any balance.
• Complimentary Virtual Debit Card: The account comes with a free virtual debit card that includes benefits such as cashback offers and discounts, adding value to everyday transactions. For the physical Delights Debit Card, you can submit an application separately.
• Ease of Transactions: With UPI and NEFT/RTGS facilities, transferring funds is quick and convenient, enhancing the overall banking experience.
• Rewards & Cashback: The Indus Delite Zero Balance Savings Account is perfect for you if you like to earn rewards and cashback on your spends. The Account offers features such as 5% cashback on spending categories like fuel, dining, etc.

The Indus Delite Zero Balance Savings Account is well-suited to take advantage of the proposed On-Realisation Settlement, providing customers with quicker access to their funds. As cheque deposit time and clearance time become faster, an online Savings Account opening can offer flexibility and ease of access to funds.

Also Read: Decoding Bank Cheque Books

Conclusion

The RBI’s proposed On-Realisation Settlement marks a significant advancement in India’s banking sector, promising faster and more secure cheque transactions. As this system is set to change how we handle cheque payments, consumers must ensure their banking choices are aligned with these developments.

The Indus Delite Zero Balance Savings Account from IndusInd Bank is an ideal option for consumers looking to benefit from these changes. With its flexible features and alignment with the upcoming rapid cheque clearance system, it offers a strategic advantage in managing personal finances.

Open an online Zero Balance Account with IndusInd Bank today!

Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.