Indian Financial System Code (IFSC Code) is an 11-digit alphanumeric combination and is used for online fund transfer transactions done via NEFT, RTGS and IMPS.
The Reserve Bank of India (RBI) assigns the IFSC code to each bank branch. Knowing the IFSC code of the bank branch is essential to transfer funds. Online transfer of funds cannot take place without the IFSC code.
You can find the IFSC code on your mobile banking app, the front page of your passbook and cheque book.
Now, few banks have made it easier to transfer funds without the use of the IFSC code. The IFSC code does not revise or change on a regular basis. It mostly changes if the bank goes through any takeovers or acquisitions.
What constitutes an IFSC code?
As stated earlier, IFSC code consists of 11 digits. KKBK0001398 is one such example of an IFSC code. The first 4 digit of the IFSC code depicts the banks. KKBK represents the bank name. In this case, it is Kotak Mahindra Bank.
The 5th character is a zero.
The other 6 characters helps to identify the bank branch. In this case, 001398 attributes to Kotak Bank’s Juhu Mumbai branch in the Greater Bombay District in the state of Maharashtra.
Every bank branch has its own unique IFSC code. Hence, in case you have multiple bank accounts, then each bank will come with a different IFSC code.
How does the IFSC code work?
When a customer wants to transfer funds, they need to put the account number and IFSC code. Later, the money is sent to the account holder and IFSC code helps to avoid any errors in the transfer.
IFSC code is also required for investing in mutual funds or purchasing insurance through net banking. Many of these facilities are available on auto debit and hence, it is required to furnish your IFSC code while setting up the account. It helps RBI to keep track of the different transactions
Advantages of IFSC Code:
Quick Money Transfer:
The online transaction of transferring money can be carried out instantly with the help of the IFSC code.
Monitoring The Fund Flow:
Thanks to the IFSC code, you now have a start and end points to monitor the flow of funds from one account to another. This helps in avoiding potential frauds.
Elimination of Errors:
Having a unique Identification code helps in eliminating errors or discrepancies arising during the fund transferring process.
Safe Money Transfer:
By using the IFSC code, you can directly transfer money from one account to another.
Easy to Differentiate:
Every bank branch has been assigned a unique ID by Reserve Bank of India (RBI) that differentiates it from other branches.
National Electronic Fund Transfer (NEFT)
NEFT is one of the most opted modes of transferring funds from one bank account to another. Customers can transfer up to Rs.2 lakhs per day. Net Banking, Phone Banking, Mobile Banking and Branch Banking are some of the channels offered by banks to transfer funds from one bank account to another via NEFT.
Real Time Gross Settlement (RTGS)
This mode of transfer is essentially for high-value funds transactions. The minimum transferrable amount through RTGS is Rs. 2 lakhs and there is no cap on the maximum. The RTGS service can be availed from 9 AM to 4:30 PM on weekdays and 9 AM to 2 PM on Saturdays. Transfers through RTGS takes place on a real-time basis. The funds are transferred in approximately 30 minutes to an individual.
When transferring money through RTGS, make sure your bank and the beneficiary’s bank are RTGS-enabled and you have the IFSC code of the beneficiary’s bank branch.
Immediate Payment Service (IMPS)
National Payments Corporation of India introduced IMPS in 2010. This mode of transfer is instant and works 24*7! It can be used 365 days a year to transfer funds from one bank to another. There is no need to register separately for IMPS service. Once you are logged into your mobile banking app, you can choose from NEFT, RTGS or IMPS to transfer the funds.
How to Search for IFSC Code?
You can search for the IFSC Code through onlineaccountopen.in
Here’s what you need to do:
Select the bank (SBI, Axis, HDFC, etc.)
Select the State (Andhra Pradesh, Maharashtra, etc.)
Select District and
Select Branch
Your IFSC Code and MICR code will be shown in a box below.
What is MICR?
Magnetic Ink Character Recognition (MICR) is a technology used to verify the authenticity of paper-based documents issued by the bank. Special ink, which is sensitive to magnetic fields, is used in the printing of certain characters on the original documents.
Magnetic Ink Character Recognition (MICR) authenticates the credibility and legality of paper-based documents in the banking database.
For the printing of certain characters on the original documents, a special ink (sensitive to magnetic fields) is used. Magnetic Ink is used to print numbers and characters found on the bottom of the checks.
MICR code is used to verify cheques for clearances as the code is a product of a highly advanced Character Recognition Technology (CRT). MICR provides a secure, high-speed method of scanning and processing information.
MICR is a nine digit numeric code where each three digits signify some important details about the bank and the transaction. The first three digits of the MICR represent the city code which indicates the city in which the bank branch is located. The next three digits represent the bank code i.e. the identity of the bank and the last three digits depicts the bank branch code i.e. the identity of the location of the bank branch.
Difference between IFSC and MICR?
The main purpose of IFSC code is for electronic money transfer and making sure that the money is going to the right account. On the other hand, MICR is used in cheques so that the process is made simpler and faster.
IFSC code has 11 digits while MICR code is 9 digit numeric code. It plays an important role in authenticating the transaction. Now, it is super easy to find out the IFSC code through our IFSC code checker.
