RBI Announces Continuous Clearing Of Cheques Under CTS

The Reserve Bank has revamped the cheque truncation system (CTS), which currently processes cheques with a clearing cycle of up to two working days, to improve the efficiency of cheque clearing and reduce settlement risk for participants, apart from enhancing customer experience.

Transition the CTS from the current approach

Accordingly it has decided to transition the CTS from the current approach of batch processing to continuous clearing with on-realisation-settlement. From now on, cheques will be scanned, presented, and passed in a few hours and on a continuous basis during business hours, the RBI said, adding the clearing cycle will come down from the present T+1 days to a few hours.

Public repository of loan apps

With online financial frauds happening unabated despite many a regulatory measure to protect the gullible public, the Reserve Bank has announced the creation of a public repository of digital lending apps which will have to deployed by the lenders.

Guidelines on digital lending

Noting that even though the guidelines on digital lending addressing protection of customers interest, data privacy, concerns on interest rates and recovery practices, mis-selling etc were issued on September 2, 2022, there are many unscrupulous players in the digital lending space who falsely claim their association with RBI regulated entities.

Creating a public repository of DLAs

Accordingly, to aid customers in verifying the claim of digital lending app’s (DLAs) association with lenders, the Reserve Bank is creating a public repository of DLAs deployed by the lenders which will be available on the RBI website, the governor Shaktikanta Das said while announcing the regulatory measures in the monetary policy statement. The repository will be based on data submitted by the lenders directly to the repository and will get updated as and when the ledners report the details- that is the addition of new DLAs or deletion of any existing DLA., Das said.

Get fortnightly credit scores now

In another step, the RBI asked credit bureaus, which are now required to report credit information of their borrowers to credit information companies on a monthly basis, to provide fortnightly credit reports with a view to provide a more up-to-date picture of a borrower’s indebtedness.

Increase the frequency of reporting of credit information

It has been decided to increase the frequency of reporting of credit information from monthly intervals to fortnightly basis or at such shorter intervals, he said.

Beneficial to both borrowers and lenders

The fortnightly reporting will be beneficial to both borrowers and lenders as borrowers will have the benefit of faster updation of information, especially when they have repaid the loans while lenders will be able to make better risk assessment of borrowers and also reduce the risk of over-leveraging by borrowers.

Enhancing UPI limits for tax payments

The RBI also increased the limit on UPI paymets for tax filing five fold to Rs 5 lakh per day, up from Rs 1 lakh now. For all other payments, the existing daily cap will continue. Based on the various use-cases, the Reserve Bank has periodically reviewed and enhanced the limits for a few categories like capital markets, IPO subscriptions, loan collections, insurance, medical and educational services etc.