What is IFSC Code?
The Reserve Bank of India (RBI) assigns the IFSC codes to the bank. Apart from the cheque leaf, you can also find the IFSC code on the official website of the bank and the RBI.
In case you are using net banking to transfer money, it is mandatory for the IFSC to be entered to initiate the transfer. Unless there is a merger, banks do not modify or change the IFSC code.
If you wish to transfer money from your account to another account, then all you need is the name of the beneficiary, bank branch, their account number, and the IFSC Code. You must note that IFSC Code is different for every bank branch and hence you must put the correct code so as to eliminate the chance of your fund going to any other person’s branch.
Having the account number and IFSC code ensures you can transfer fund from your account to another one anytime in a hassle-free manner.
IFSC Code : Key Features
- Helps uniquely identify a specific bank branch
- Helps eliminate errors in the fund transfer process
- Used for all electronic payment options such as NEFT, RTGS and IMPS
Bank IFSC Code Format:
Code for Bank Name
Code for Branch Name
Locate IFSC and MICR Code on a Bank Cheque :
A lot of the above discussions have centered on the common bank cheque. This mainstay of the banking world is an amalgamation of a number of components that help to authenticate whether it is genuine and allow us to attach our complete faith in its applicability.
The primary components of a typical bank cheque are illustrated as follows:
Find IFSC Code in a Bank Cheque:
On a typical bank cheque, it is mandatory for the IFSC code to be listed. The IFSC code will vary from bank-to-bank. In our example image: we are displaying the location of the IFSC code on a HDFC Cheque.
Locating Cheque Number:
Displayed in a typewritten font at the bottom of the cheque in special font style. This is primarily used for tracking the cheque and for other administrative purposes.
Find MICR Code in a Bank Cheque:
This is displayed next to the cheque number. Both Cheque number and MICR Code are displayed in a unique font and ink, and the latter can only be picked up by a Magnetic Character Ink Reader.
Necessity of Indian Financial System Code
We need an IFSC code because it helps the RBI monitor all banking transactions without any blunders. A simple IFSC code can aid the RBI track, oversee, and seamlessly maintain all financial transactions that are carried out via NEFT, RTGS and IMPS.
For bank customers, IFSC code is important because most electronic fund transfers cannot be initiated unless the IFSC code of the beneficiary/payee is provided along with the bank account number.
IFSC code plays an important role when money is transferred from one account to another through methods such as IMPS, NEFT and RTGS. All these options are fundamentally concerned with inter-bank money transfer but perform this task in different ways. The common thread amongst these varied options is the bank IFSC codes system.
Online money transfer using IFSC Code:
The IFSC code can be used to transfer funds using three electronic fund transfer modes such as NEFT, RTGS and IMPS. These types of electronic fund transfers enable customers to easily transfer funds from one account to another.
Choosing electronic transferring systems brings down the chances of error in a transaction because fund transfers are only authorised if accurate details such as the payee’s bank specific IFSC code and bank account number are provided.
- NEFT: The full form of NEFT is National Electronic Fund Transfer. As the name specifies, it concerns with the transfer of funds from one bank account onto another. This is a popular money transfer system in India. Herein, IFSC codes must be suitably provided to ensure that money is safely transferred from one bank account to another. Apart from the IFSC code, the beneficiary name, account number and account type are also needed to be provided. All NEFT transactions are settled in a batch-wise format.
- RTGS: RTGS is the acronym for Real Time Gross Settlement. As the name suggests, it is a popular option for the quick transfer of funds (also securities) from one bank to another, without subjecting the same to any waiting period. The operative words here are ‘Real Time’ (transactions happen instantaneously) and ‘Gross’ (refers to the fact that no extra charges will be levied). IFSC codes act in a similar way as in the case of NEFT- helping to correctly identify the participating bank branches. RTGS fund transfers are usually used for high-value transactions and are cleared immediately. The details required for RTGS fund are the name of the payee, the IFSC code, the account number, and the transaction amount.
- IMPS: IMPS, short for Immediate Payment Service, is the most popular. It is a relatively new option in India (founded in November 2010). Through this service, money can be transferred instantly and across all popular Indian banks via the service available on the subscriber’s mobile phone, ATM or through the internet. This system is reputed for being very safe, fast, economical and not restricted in terms of the maximum amount that can be transferred. One cannot initiate an IMPS fund transfer without providing an IFSC code.
The IFSC code consists of 11 characters in total. These characters are a combination of both alphabetic letters and numeric digits. The first four characters of the IFSC code represent the bank, while the fifth character is ‘0’ (zero), reserved for future use. The final six characters uniquely identify the specific branch of the bank.
Finding an IFSC (Indian Financial System Code) using an account number is not directly possible. The IFSC code is a unique 11-digit alphanumeric code that helps identify a specific bank branch in India. It is primarily used for electronic funds transfer like NEFT, RTGS, and IMPS.
If you enter an incorrect IFSC (Indian Financial System Code) while making a transaction, several outcomes may occur:
Transaction Rejection: The transaction may be rejected. The IFSC code is crucial for routing funds to the correct bank branch. If the code is incorrect, the transaction cannot be processed, and the money may not reach the intended recipient.
Delay in Processing: If the IFSC code is incorrect, it might lead to a delay in processing your transaction. The bank will have to manually investigate and rectify the error, which could take some time.
Return of Funds: In some cases, if the IFSC code corresponds to a valid but incorrect branch, the funds may be credited to that branch. However, the branch will then attempt to reconcile the transaction with the account holder. If they cannot, the funds will be returned to your account.
No, two branches of different banks cannot use the same IFSC (Indian Financial System Code) code. Each branch of a bank is assigned a unique IFSC code that helps in the identification and routing of transactions.
Yes, it is possible to recover money if it has been paid into the wrong account. However, the process may vary depending on the circumstances and the policies of the involved financial institutions.
Checking your bank balance using your account number and IFSC (Indian Financial System Code) code can be convenient, especially when you don’t have access to your physical bank statement or don’t want to visit the bank in person. Here’s a step-by-step guide on how to do it:
Secure online payments in India require an Indian Financial System Code (IFSC) for several important reasons:
Identification of Bank and Branch: The IFSC is a unique alphanumeric code that helps identify a specific bank and its branch in India. Given the vast number of banks and branches across the country, the IFSC system ensures accuracy in routing payments to the correct destination. This is crucial to prevent payment errors and ensure funds reach the intended recipient.
NEFT and RTGS Transactions: The Reserve Bank of India (RBI) mandates the use of IFSC codes for electronic funds transfer systems like National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS). These systems enable secure, quick, and efficient transfer of funds between different banks and their branches. The IFSC ensures that transactions are processed accurately and promptly.
UPI and Mobile Banking: In the era of digital payments, the Unified Payments Interface (UPI) has gained widespread popularity in India. IFSC codes play a vital role here as well. While transferring funds through UPI or mobile banking apps, users often link their bank accounts by entering the bank’s name and IFSC code. This ensures that money is routed to the correct account.
E-commerce and Bill Payments: When making online purchases or paying bills through websites and apps, consumers may be required to enter their bank account details, including the IFSC code, to complete the transaction securely. This information ensures that payments are accurately credited to the seller or service provider.
Preventing Fraud and Errors: The use of IFSC codes helps prevent fraudulent transactions and errors in fund transfers. Verifying the IFSC code ensures that the recipient’s bank account is legitimate, reducing the risk of sending money to the wrong account.