What is IFSC Code & MICR Code: Bank Branch Codes Explained

The IFSC code is a unique alphanumeric code assigned to each bank branch, while the branch code is a numerical code assigned to a bank branch for identification purposes. Indian Financial System Code or IFSC is used for fund transfers while Magnetic Ink Recognition (MICR) is used to process and clear cheques. On the other hand, branch code is simply used to identify a particular branch and this code can be found both in the IFSC and the MICR code. This code is used by electronic payment system applications such as RTGS ( Real Time Gross Settlement), NEFT (National Electronic Fund Transfer), CFMS (Centralised Funds Management Systems). Yes it ‘ll change but if you are using the same IFSC even (The old one) it ‘ll not make any difference for customer transactions on CBS platform. Getting the bank’s name from first four digits and the account number, the funds ‘ll be parked in the correct account but this ‘ll work for customer remittances only.

Why is the IFSC code needed?

It is also used to exchange messages and information across the banks. The MICR code is provided on each cheque leaf and is printed at the bottom of each cheque leaf. It is a 9-digit numeric code that helps in identifying the bank, the branch of the bank where the account is maintained, and other details needed to process cheque payments. Unlike barcodes, the characters present in an MICR Code can be easily read by humans without a lot of effort.

• Learn about how MICR and IFSC codes are used to easily transfer funds online and make payments through cheques.
• Every bank branch will have a unique code and no two branches (even of the same bank) will ever be the same.
• An IFSC code is essential for the RBI to effectively monitor all banking transactions without errors.
• In the case of an online fund transfer, you will need an IFSC code.
• To mitigate these risks, banks use unique identification codes to verify transactions and ensure that our money is in the right place.
• For example, a counterfeit check can be detected easily, as the magnetic ink line will not respond to magnetic fields and thus will provide an incorrect code when scanned.

The process of payee addition is easy if you have the IFSC code. The steps needed to add a payee into an online bank account is shown below. We maintain a comprehensive and updated database of bank branches along with the corresponding BIC codes (formerly known as SWIFT codes) and the IFSC codes. BIC codes are used to perform an international fund transfer between two countries.

You will have to enter the UPI PIN to perform all UPI transactions. Moreover, irrespective of the bank’s working hours, an individual can instantly transfer funds anytime. IFSC code what are ifsc and micr codes is used by electronic payment system applications such as real-time gross settlement (RTGS), NEFT and Centralised Funds Management System (CFMS). This code is mandatory for fund transfers from one bank account to another. Each country has its own codes and options for electronic fund transfer. For instance, the IFSC code is a code governed by the Reserve Bank of India (RBI) and is used for electronic fund transfer across India.

You simply need to make sure that your, as well as the beneficiary’s, bank accounts are RTGS-enabled and you have the IFSC code of his/her bank branch. Afterwards, you need to add the beneficiary to your account to whom you want to transfer the money. To do this, you will need the beneficiary’s name, her/his bank account number and the IFSC (Indian Financial System Code) of her/his bank branch.

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Money can be transferred from one bank account to another safely using RTGS. IFSC code is often referred to as RTGS code or NEFT code for the same reason. IFSC and MICR both can be used in context to financial system code.

The check is also sent along with the fund transfer request to the source bank. After the source bank validates the information received, the fund is credited to the recipient’s bank. The IFSC is an 11-digit alpha-numeric code, with the first four digits identifying the bank, the fifth numeric (kept 0), and the last six digits representing the bank branch. This gets executed by raising a single debit to the bank account of the user’s institution.

How to find the SWIFT Code?

• The Reserve Bank of India (RBI) is the apex bank in India and has stipulated the maximum time for a fund transfer by check.
• Money can be transferred from one bank account to another safely using RTGS.
• The MICR code is printed on the bottom of the check or DD using a special magnetic ink.
• This means that the time to en-cash an outstation check in a remote location can be a maximum of 14 days.
• As the National Clearing Cell of Reserve Bank of India monitors all transactions, IFSC Code helps RBI to keep a track of various transactions and execute fund transfer without any hassle.

Every major bank branch participating in electronic fund transfer is assigned a unique IFSC code. The IFSC code is necessary for performing any electronic fund transfer operation within India. Other means are available to initiate an electronic fund transfer. Most major banks have branches that are NEFT and RTGS enabled. It is possible to place a request at these banks for electronic fund transfer.

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An IFSC code is essential for the RBI to effectively monitor all banking transactions without errors. A basic IFSC code enables the RBI to supervise, oversee, and efficiently manage all financial transactions conducted through NEFT, RTGS, and IMPS. The IFSC code is also used by the RBI and other regulatory authorities to track and monitor the flow of funds within the banking system.

We shall also not be liable for your use or inability to use the site or the information or services that it contains. The final steps after clicking ‘Continue’ are confirmation screens. Banks use SWIFT for international transfers, but it’s not the most efficient or cost-effective solution as youyou might get a bad exchange rate and pay high fees. We recommend using Wise, formerly TransferWise, which is up to 5x cheaper and gives you a great rate.

Let’s try to understand basic difference between MICR and IFSC Code. Your bank can halt the cheque if something seems off or they sense potential fraud. Many times, the cheque issuer may not have enough funds for cheque payment. You can retrieve the IFSC code from your savings account number by visiting your bank’s website or contacting their customer service department. At Kotak Mahindra Bank, we ensure to provide you with round-the-clock customer support assistance. The IFSC stands for the Indian Financial System Code, a unique identifier assigned to each bank branch in India.

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The MICR number allows computers to rapidly internalize a check number, routing number, account number, and other numbers or information from printed documents, such as a personal check. The MICR number, which is sometimes confused with just the account number, is printed with magnetic ink or toner on a check, usually in one of two major MICR fonts. The magnetic ink allows the computer to read the characters on a check even if they have been covered with signatures, cancellation marks, or other marks. RTGS is one of the main payment and settlement systems in India. To make a payment using RTGS, one requires details like name of the account holder, account number and the IFSC code of the bank.