Mandatory Bank Participation in Special Clearing
- The Reserve Bank of India (RBI) has directed all banks to participate in special clearing operations on March 31, 2025.
- This is to ensure the accounting of all government transactions within the financial year 2024-25.
Financial Year-End Government Transactions
- India’s financial year runs from April 1 to March 31.
- Agency banks must ensure that all government receipts and payments are accounted for within the same financial year.
- Over-the-counter (OTC) transactions at branches handling government business will remain open till normal working hours on March 31, 2025.
Special Clearing Under Cheque Truncation System (CTS)
- The RBI has decided to conduct special clearing under CTS exclusively for government cheques.
- Clearing Timings on March 31, 2025:
- Presentation Time: 5:00 PM – 5:30 PM
- Return Session: 7:00 PM – 7:30 PM
- Banks must keep their inward clearing processing open and maintain sufficient balance for clearing settlements.
Extended Working Hours for Tax Offices
- Income Tax and CGST offices will remain open from March 29 to March 31, 2025, despite the weekend and Eid-al-Fitr (potentially falling on March 31).
- This ensures smooth processing of year-end government tax collections.
Implications for the Banking System
- Banks will need to adjust liquidity management to facilitate smooth settlements.
- RBI’s move aligns with its broader efforts to ensure seamless financial closure for the fiscal year.
This initiative ensures efficient year-end accounting, uninterrupted tax collections, and smooth financial transactions for government-related payments.
