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What does Uncleared balance in your bank account mean?

Asks one of my friend Ashok. It seems a relative of his has deposited an account payee cheque a couple of days ago and that amount is showing as ‘Uncleared balance’ in his online account (SBI).

In this case, Uncleared balance means that amount which has not yet been credited to Ashoks’ account. When Ashok’s relative has deposited a cheque in a bank branch, it forwards it to a central clearing house physically. The bank in which Ashok has his account will then collect that cheque, verify it and then credit the specified amount to Ashok’s account, by debiting the same from his relative’s account. At this stage, the cheque is cleared and the amount which is being shown as ‘Uncleared’ will be added to the main balance. Uncleared balance in SBI

From the point where the cheque has reached the clearing house (and collected by Ashoks’ bank) till it got cleared, his bank account will show the amount as Uncleared balance. If you have Internet Banking, you can see this either in the main balance section or in the last 5/10 transactions section. Obviously, since this amount is not credited to your account yet, one cannot use/withdraw that amount. This is just an additional feature provided by the banks’ to let you know that you’ll soon receive the specified amount (if everything is fine). Ashok’s relative will also see the same amount as Uncleared balance or Lien amount (if his bank provides such entry) but in his case its the amount which has not yet been debited from his account (but soon will be).

Same city cheques should mostly get cleared with in 2-3 days while outstation cheques might take up to 10 days. Also note that cheques presented in currencies other than INR will take longer than usual to get cleared.

This whole process is going to change though, with the introduction of new CTS 2010 standard cheques. The cheques will no longer move physically from place to place but the entire clearing process happens electronically. Same city cheques or outstation, the clearing time will be significantly reduced and the chances of getting your cheque lost somewhere (yep, happened once in my case) is taken out completely.

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  1. Akshendra Singh Rathore

    Thanks for the information. What am i supposed to do if my KYC is not updated? I can’t deposit cash but, Cash deposit box transactions are successful. Even Cheque payment is possible. Bank is asking for address proof. But wouldn’t accept domicile certificate. Electricity bill is on my uncle’s name so they rejected it.

    • What is a box transaction?

      Until you get an alternative & acceptable address proof I think you should continue with those alternative workarounds.

  2. Many thanks for such a simple yet most useful information. Well understood by a Layman like me. But what if amount remains unclear after 10 day, what should I do? Shall I touch base with my home bank branch or to the bank-branch where I deposited my cheque. Please suggest!

    • I would first ask the branch where I deposited the cheque. Because your home branch has almost no role to play here; its just the branch where you have deposited and the central clearing house.

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