What is an IFSC Code?

IFSC stands for Indian Financial System Code, It is a unique 11 digit number which is a combination of numerals alphabets. IFSC code of each bank branch is assigned by the Reserve Bank of India (RBI). The IFSC code used to transfer funds online for RTGS, NEFT and IMPS transactions. Online transactions for transferring funds using NEFT, RTGS and IMPS cannot be initiated without Indian Financial System Code. You can easily find IFSC code on the cheque book and account holder’s passbook. You can easily check the IFSC code of their bank branches on the Search IFSC Code website. Generally, there isn’t any change in the IFSC code. But Recently the SBI changed IFSC Code of its branches all over the country after the merger with 5 associate banks.

Importance of IFSC code

• Branch Unique Identification - Easily identifying a particular bank branch • Electronic Payments - It used in electronic payment transfer like NEFT, RTGS and IMPS. • Elimination Errors - Eliminate any discrepancy during fund transfer.

Bank IFSC Code Format

First 4 characters of the Indian Financial System Code are alphabets represent the bank name. The fifth character is zero (0). And, the last 6 characters are numbers represent the bank branch code.

How does IFSC CODE work?

In India Electronic funds transfer proceed with the help of alpha-numeric code is called as the Indian Financial System Code. This code recognizes each bank branch which participates in the payment systems in India, namely, Real Time Gross Settlement (RTGS), Immediate Payment Service (IMPS) and National Electronic Funds Transfer (NEFT).

Let’s take an example:

The IFSC Code of ICICI bank starts with letters ‘ICIC’. As we all know there are a lot of banks with several different branches, so IFSC code is used to identify the branch involved in the transaction. IFSC codes are vital while processing payment including RTGS, IMPS and NEFT transfers. Like, for ICICI, the IFSC Code will be ICIC0000011 for the branch located in Andheri West, Mumbai.

What Is a MICR Code?

MICR stands for Magnetic Ink Character Recognition. This innovative technology authenticates the legality and credibility of a paper-based document in the banking database. You can easily found MICR code on cheque at the bottom. It includes some other details such as the bank code, amount, account details, and cheque number. MICR code is a product of highly advanced Character Recognition Technology to verify cheques for clearance and it also used for other bank documents as well. The advantage of MICR technology is that it stands out among similar concepts, such as barcodes, as MICR can be read and distinguished by humans easily.

Difference between IFSC Code & MICR Code

As monetary transactions are not limited to financial institution thorough verification is necessary before processing a transaction. To make the transaction verification process faster and automatic, banks rely on certain codes such as MICR Code and IFSC Code, play a significant role in verifying the authenticity of a transaction. However, there is a difference between the usage of both these codes.

Benefits of MICR Code

MICR code enables quick, efficient and error-free processing of cheques. This is possible with magnetic ink, reading machines and advanced technology used in MICR.