IFSC stands for Indian Financial System Code. It is a unique eleven-digit number. It contains both alphabets and numerals. IFSC code is used in online fund transfer for NEFT, IMPS and RTGS transactions. You can find the IFSC code of your bank account on the cheque-book provided by the bank. It can also be found on the passbook of your bank account. The IFSC code of every bank branch is allocated by the Reserve Bank of India. The account bearers can easily check the IFSC code of their respective bank/branch on the website of the Reserve Bank of India. Internet banking transactions cannot be initiated without the IFSC Code.
The State Bank of India recently changed Indian Financial System Code of its branches all over India. This step was taken after the bank merged with five associate banks and 1 other bank.
The Importance of IFSC code
- Unique Identification- It helps in classifying a particular bank branch
- Elimination of Errors It helps in eliminating any discrepancy in the money transfer process.
- Makes Electronic Payments Easier- It eases the working of electronic payment tools such as RTGS, IMPS, and NEFT.
Format for Bank IFSC Code
The first 4 alphabetic characters of IFSC code represent the bank. The 5th character is zero (0). Generally, the last 6 characters are numbers but they may be alphabets as well. These represent the bank branch.
How does IFSC CODE work?
Electronic funds transfer in India is made easy by an alpha-numeric code called the IFSC Code. This code specifically recognizes each bank branch. This code is used primarily in the National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS).
Modes of Online Money Transfer Using IFSC Code- NEFT, RTGS, IMPS
Everyone today is dependent on the online transfer of money and so we all use these money transfer methods in our transaction processes. This online trend is supported by a number of options – thanks to the digitization.
The expediency of transferring funds online has made our lives easier. Today almost every bank provides multiple payment options like Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), etc.
Based on different constraints, such as the transfer speed, the value of transaction amount, service accessibility, etc. each of the above mentioned payment transfer methods will offer a varied range of features.
How to know the IFSC Code?
The process is really simple. You can easily find the IFSC Code of all the banks across India. Your passbook, cheque-book has the IFSC code printed on it. Generally on the first page itself.
However, if you are not carrying your passbook or cheque book you can easily know your IFSC code by searching it on Google. You have to type the name and the branch of your bank in the search bar and you will automatically be shown the IFSC code of your bank. All that you need to know is your bank name and branch because every branch has a separate IFSC Code.
Difference between IFSC Code & MICR Code
As financial transactions are not restricted to financial institutions like banks, systematic verification is necessary before processing a fund transfer. To make the process faster and simpler banks and other financial institutions rely on IFSC, MICR codes. They play an important role in checking the authenticity of a transaction. But there is a difference between the uses of these codes.
IFSC code is used for electronic money transfers between the banks in India. It is an 11 digit code containing both numbers and alphabets. The first four digits represent the name of the bank while the last 6 represent the location of the bank.
The MICR Code is used to make cheque processing faster. It is a 9 digit code. The first 3 digits indicate the city of the bank branch. And the last 3 digits are the bank branch code.