The Gujarat Urban Cooperative Banks Federation (GUCBF) has raised alarm over serious disruptions caused by the Reserve Bank of India’s (RBI) newly introduced Continuous Clearing System under the Cheque Truncation System (CTS).
In a strongly worded letter to the RBI’s Department of Payment and Settlement Systems (DPSS), the federation warned that the “unprecedented delays” in return clearing have triggered confusion and panic among a wide range of banks, including private, public sector, and cooperative institutions.
GUCBF Chief Executive Officer J.V. Shah, in his communication to the RBI’s Chief General Manager, referred to the central bank’s circular (dated September 28, 2025) on Special Clearing in CTS on October 3, 2025.
It was mentioned in the said circular that the Special Clearing Return Session on October 3 would be between 5:00 p.m. and 8:00 p.m. In this connection, the federation informed that member Urban Cooperative Banks (UCBs) received the Return Clearing files for October 3 only at 10:20 p.m. on that day.
Similarly, as mentioned in the RBI circular, the Return Clearing Session timing was fixed around 7:00 p.m. from October 4, 2025, to January 2, 2026. However, the Return Clearing for October 4, 2025, was received at 11:30 p.m. on October 5, 2025.
“This inordinate delay has caused operational disruption and severe hardship to Urban Cooperative Banks (UCBs),” the letter said. “Such delays are likely to result in defaults in the maintenance of Cash Reserve Ratio (CRR) and are creating widespread anxiety among customers due to non-credit of proceeds on the same day,” Shah added.
According to the federation, the issue is no longer confined to cooperative banks alone. “The delay in clearing has become a matter of panic not only for private and public sector banks but also for a large number of cooperative banks across the country,” the letter stated, underlining the magnitude of the disruption.
While acknowledging that technical challenges may arise during the initial implementation of a new system, the GUCBF urged the central bank to take immediate corrective action.
It also requested the RBI to consider postponing the implementation of continuous clearing by one month to ensure smoother functioning during the upcoming Diwali season, when cheque volumes are expected to rise sharply.
“The current situation, if not addressed swiftly, may lead to widespread operational bottlenecks, customer dissatisfaction, and reputational challenges for the banking system as a whole,” the federation warned.