IFSC is short for Indian Financial System Code and represents the 11 digit character that you can usually see on your bank’s cheque leaves, or other bank sponsored material. This 11 character code helps identify the individual bank branches that participate in the various online money transfer options like NEFT and RTGS.
What is IFSC?
IFSC stands for Indian Financial System Code. It is an 11-digit alpha-numeric code that uniquely identifies a bank-branch participating in any RBI regulated funds transfer system. The IFSC code helps to transfer money using RTGS, NEFT, or IMPS method. The first 4 digits of the IFSC represent the bank and the last 6 characters represent the branch. The 5th character is zero. IFSC CODE
What is MICR?
MICR is an acronym for Magnetic Ink Character Recognition which is a technology used in the banking industry in printing the MICR codes. A MICR code is a 9-digit code that uniquely identifies a bank and a branch participating in an Electronic Clearing System (ECS). The first 3 digit of the code represents the city code, the middle ones represent the bank code and the last 3 represents the branch code. One can locate the MICR code at the bottom of a cheque leaf, next to the cheque number. It is also normally printed on the first page of a bank savings account passbook. IFSC CODE
What is the use of MICR Code?
MICR Code is used in the processing of cheques by machines. This code enables faster processing of cheques. One is required to mention the MICR code while filling up various financial transaction forms such as s investment forms or SIP form or forms for transfer of funds etc.
What is a cheque number?
A cheque number is a 6-digit number uniquely assigned to each cheque leaf. It is written on the left-hand side at the bottom of the cheque. It is advisable to check i.e. count and check the number on each cheque leaf in a new checkbook when you receive it from the bank. This is to ensure that no cheque is missing from the checkbook. Ideally, you should record the transaction you have used each cheque leaf for in the transaction record slip attached at the start or end of a checkbook. In this record, you should mention the cheque number, date of the cheque, amount, and payee.
Where is the MICR number on a cheque?
A MICR number on the cheque is written at the bottom of the cheque, on the right-hand side of the cheque number.
Importance of IFSC Code
The significance and benefits of the Indian Financial System Code (IFSC) are as follows:
The code uniquely identifies a specific bank branch, hence helping customers to avoid any possible mistakes during the online transfer of funds via NEFT, RTGS or IMPS
The customer need not visit the branch for any financial transfer, hence can opt for online money transfer with the help of the IFSC Code. It is, therefore, a rather convenient and eco-friendly option
All the online transactions including paying bills can be easily processed with the help of the IFSC code
The code is used by the RBI to monitor all the online transactions performed by an individual hence eliminating the chances of any discrepancy in the fund transfer process
Why is the IFSC Code required?
IFSC Code is used to facilitate the electronic or online transfer of funds using NEFT, RTGS, and IMPS
The code helps the respective bank with IFSC Code as well as the RBI to track and seamlessly maintain all financial transactions which are carried out using online payment services
The IFSC code is required to make an online payment to another bank so it can recognize the specific beneficiary's branch where the amount has to be credited
IFSC helps in the unique identification of all banks and their respective branches enabling customers to avoid any fraudulent activity while facilitating online fund transfer
How to use IFSC Code?
Given below are the different uses of the IFSC Code. It is to be noted that the IFSC code helps to route the fund transfer to the concerned banks and their branches.
Electronic Funds Transfer:
With the help of the IFSC Code, the user can transfer funds online instantly and conveniently. One needs to mention the beneficiary’s bank account number, bank branch, and IFSC code to carry out convenient online transactions
Credit Card Bill Payments: IFSC code can also be used to make credit card bill payments. The transactions can be performed using mobile phones, tablets or laptops
Methods to transfer money by using IFSC Code
The use of the IFSC Code is mandatory in the electronic or online transfer of funds using NEFT, RTGS, and IMPS. It is to be noted that the NEFT and RTGS payment services were introduced by the Reserve Bank of India (RBI), while the IMPS service was introduced by NPCI (National Payments Corporation of India).
The 3 main payment services through which online transfer of funds is initiated include NEFT, RTGS & IMPS.
