RBI MPC meet – Cheque clearing time reduced, UPI limit increased for tax payment

• The Reserve Bank of India has announced changes to the cheque-clearing process.
• Cheques will now be cleared on the same day they are presented.
• The central bank has also enhanced the UPI limit for tax payments.

Reserve Bank of India (RBI) Governor Shaktikanta Das at the Monetary Policy Committee (MPC) meeting on Thursday announced changes to the cheque-clearing process. The central bank kept the rates unchanged at the meeting.

The RBI governor said that the cheque-clearing process will be continuous and result in the same-day clearing of cheques. This has been done to bring down the time taken for cheque clearing and reduce settlement risk for participants.


At present, cheque clearing is done through the Cheque Truncation System (CTS), which operates in a batch processing mode and has a clearing cycle of up to two working days. To reduce the clearing cycle, RBI has proposed to introduce continuous clearing with 'on-realisation-settlement’ in CTS.

With this, the RBI says that the cheques will be cleared within a few hours after it is presented at the bank.

“This will speed up cheque payments and benefit both the payer and the payee,” the governor said in his speech.

The cheques will be scanned, presented, and passed in a few hours and on a continuous basis during business hours. The clearing cycle will reduce from the present T+1 days to a few hours.

The central bank has said that it will soon provide detailed guidelines for the new cheque-clearing process to banks.

Increased UPI limit for tax payment

The central bank has also proposed the enhancement of the transaction limit for Unified Payments Interface (UPI) transactions for tax payments from the current ₹1 lakh to ₹5 lakh.

Delegated payments through UPI

RBI has also proposed a new “Delegated Payments” feature for UPI. This feature will allow users to allow other individuals to make UPI transactions up to a limit from the primary user’s bank account without the need for the secondary user to have a separate bank account linked to UPI.

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