RBI To Accelerate Cheque Clearance With Continuous Processing System

New Delhi, Aug 8 (KNN) The Reserve Bank of India (RBI)-led Monetary Policy Committee (MPC) has announced several measures to expedite the clearance of cheques, aiming to reduce the clearing cycle from the current T+1 days to just a few hours.

RBI Governor Shaktikanta Das made this announcement while presenting the results of the bi-monthly policy meeting.

The new system will involve cheques being scanned, presented, and processed continuously during business hours. "Detailed guidelines in this regard shall be issued shortly," Governor Das stated.

Presently, the Cheque Truncation System (CTS) processes cheques with a clearing cycle of up to two working days. The proposed change is expected to enhance the efficiency of cheque clearing and reduce settlement risk for participants, ultimately improving customer experience.

"It is proposed to transition CTS from the current approach of batch processing to continuous clearing with 'on-realisation-settlement'," Das added.

In addition to the cheque clearance improvements, the RBI has raised the limit for tax payments through the Unified Payments Interface (UPI) from Rs 1 lakh to Rs 5 lakh per transaction.

The UPI system, with a substantial user base of 424 million individuals, is poised for further expansion.

The MPC has decided to keep the repo rate unchanged at 6.5 per cent and maintains a focus on withdrawing accommodation.

The inflation forecast for the fiscal year FY25 remains steady at 4.5 per cent, despite concerns over food prices and geopolitical tensions that could impact crude oil prices.

The central bank projects inflation for Q2, Q3, and Q4 of FY25 at 4.4 per cent, 4.7 per cent, and 4.3 per cent, respectively.

This is a slight adjustment from the June policy, which had pegged the inflation readings at 3.8 per cent, 4.6 per cent, and 4.5 per cent, respectively.

On the growth front, the MPC continues to expect the Indian economy to grow at 7.2 per cent in FY25, although it has moderated the outlook for the first quarter.

The forecast for Q1FY25 has been reduced to 7.1 per cent, down from the previous projection of 7.3 per cent.

However, the projections for Q2FY25, Q3FY25, and Q4FY25 remain unchanged at 7.2 per cent, 7.3 per cent, and 7.2 per cent, respectively.

Governor Das reiterated the central bank's commitment to monitoring economic conditions closely and taking necessary actions to ensure financial stability and sustainable growth.

(KNN Bureau)