How long does a cheque take?
The time taken for processing a cheque depends on a few factors-
• Local Clearing
• Outstation Clearing
• Transfer to the same branch
• High Value Clearing
Let’s look at these things in detail
Local clearing
This is when you deposit a cheque at a bank branch in the same city. That is, if you have a bank account in the same city, then local clearing takes place.
The procedure for local cheque is as follows:
Day 1: You deposit the local cheque into your bank account.
Day 2: Your bank sends it to the clearing house of Reserve Bank of India. A clearing house is an association of banks, in which cheques of different banks in a city are cleared.
At the clearing house, banks collect cheques, which are drawn from any of their branches.
The headquarters of these banks send the cheques to the respective branches for clearing. It is also called inward clearing cheque.
Day 3: The amount is credited to your account. If the bank is not successful in transferring the amount from the customer’s account to your account (for whatever reason), the cheque is returned to the same bank that presented the cheque. (This is the bank with which you have an account.)
A cheque credited to your account gets credited within 2-3 days.
Outstation clearing
As the name suggests, you deposit a cheque that belongs to a bank branch in another city. It is the same process as before, with only one difference. It takes a long time for the money to arrive in your account. The reason for this is that physical cheques take some time to travel from one city to another.
Normally it takes 7-10 days for outstation clearing. It depends on where the bank branch is located.
Transfer to same branch
When the drawn cheque is deposited in the branch where you have an account, then it takes the least time. The same day you get the money in your account.
High value clearing
A cheque of one lakh rupees or more is called high value. In High Value Clearing (HVC), your local cheque gets cleared on the same day. The money is credited to your account the very next morning.
For this, you should deposit money before the cut off time in the morning. Keep in mind that the processing of cheques should be done under HVC.
Smart Tip 1: cheque your bank’s cheque collection policy. According to the Reserve Bank, all banks have to follow this policy. It should be seen by the customers that what is the stipulated time for the amount to arrive in their account.
Smart Tip 2: cheque out the applicable outstation clearing and HVC charges by your bank. In case of outstation cheque, banks charge Rs 15 to 500. It is levied according to the amount and location of the cheque. The Reserve Bank has given a proposal to cut these charges. This will benefit the customers. As far as HVC is concerned, the charges range between Rs 20 to 50.
