IFSC Code: Indian Financial System Code
The Indian Financial System Code (IFS Code) is an 11-character Alpha Numeric code that acts as a distinct identifier for bank-branch in India, transacting under different Electronic Payments and Funds Settlement Systems such as NEFT, RTGS.
IFSC Code is used to identify the originating / destination banks / branches and also to route the messages appropriately to the concerned banks / branches, for almost all type of Intra Branch or Inter Banks financial transactions involving mainly:-
IFSC Code Format and its Significance
- RTGS (The Real Time Gross Settlement)
- NEFT (The National Electronic Funds Transfer)
- ECS (Electronic Clearing Service)
- ACH (Automated Clearing House)
- IMPS (Immediate Payment Service)
- EFT (Electronic Fund Transfer)
- Wire Transfer etc
- IFS Code has 11 Alpha Numeric Characters
- The first four alphabetic characters represent the bank name.
- The fifth character in IFSC Code is always 0 (zero) and is reserved for future use.
- The last six characters which are generally numeric, but some times can be alphabetic, represent the branch.
Example IFSC Code: SBIN0000691
Information it conveys :-
|[State Bank Of India]
||[New Delhi Main Branch]
|[First 4 Characters]
||[Last 6 Characters]
MICR Code: Magnetic Ink Character Recognition Code
MICR Code is a 9-Digit Numeric code assigned to a Bank by Reserve Bank of India that uniquely identifies a bank participating under its MICR based cheque clearing system.
MICR is infact an independent technology deployed for printing of magnetic code which are machine readable, secure and faster to process.
Since its adoption in early 1980s by RBI, this MICR based cheque clearing system has been instrumental in safer and faster processing of cheque payments across the country.
MICR Code Format and its Significance
- MICR Code has nine digits
- The first three digits of MICR Code, represent the city name. So, the "First Three Digits" of MICRCode of all the bank branches will be same for a particular city.
- The next three digits of MICR Code, represent the bank name. Therefor, the "Middle Three Digits" of MICR Code, will be same for all branch locations in the India for a partcular bank.
- The last three digits of MICR Code, represent the bank branch and generally in the order of its inception in respective city
Example MICR Code: 400240003
Information it conveys :-
MICR Code: How it automates the Cheque Clearing
||[NARIMAN PT BRANCH]
|[First 3 Digits]
||[Middle 3 Digits]
||[Last 3 Digits]
Priore to implementation of MICR Code in Indian Banking, the manual clearing of cheques was quite slow and had always scope for human errors resulting in further unwanted delays in cheque clearing.
The MICR Codes are printed on the cheques using a special magnetic ink. The Cheque so printed with MICR Code, when inserted in cheque scanning machine, gets instantly decoded for necessary info for authentication such as name of concerned bank, its city location, originating branch and initiate the electronic clearing process.
MICR Code is present at the bottom strip of bank"s cheque leaves.";
RBI guidelines: IFSC And MICR Code
is must for all banking transactions linked with electronic clearing services (ECS - credit and debit) .
is a primary requirement for NEFT (The National Electronic Funds Transfer) and RTGS (The Real Time Gross Settlement) based transactions.
As per RBI instruction it is mandatory for all the Banks to print IFSC and MICR code of the their respective branch on the cheque leaf, passbook and the statement of account of the customers.