What is Indian Financial System Code (IFSC)?
IFSC, short of Indian Financial System Code, is simplifying modern banking from what was once a purely paper based system. From challans to net banking, from long queues at the tellers to fund transfers in mere minutes, Banking today is an amalgamation of various helpful technologies and accountable yet simplified procedures that is far removed from the traditional systems of old. In this regard, the concept of IFSC Codes at least in the context of Indian banking, is absolutely the simplest, yet most path breaking update in recent times. Indian Financial System Code (IFSC) is fundamentally important when it comes to online money transfers, ergo, it plays a key role in almost every India based financial transaction happening over the limitless expansion of the World Wide Web today.
What Does IFSC Stand For?
IFSC is short for Indian Financial System Code and represents the 11 digit character that you can usually see on your bank's cheque leaves, or other bank sponsored material. This 11 character code helps to identify the individual bank branches that participate in the various online money transfer options like NEFT and RTGS.
Why do we need the Indian Financial System Code?
In simple terms, IFSC, short for Indian Financial System Code, is an alphanumeric code that is used to identify the particular branch of a participating bank in either of the popular electronic funds settlement options in India, namely RTGS and NEFT. The standard IFSC Code is a 11 character entity, with the first four characters representing the bank's name, the fifth character is '0' (Zero) and is reserved for future use, with the final six numeric/alphabetic characters represent the specific branch of the bank. This code is crucial when money is transferred online from one bank to another across the length of India, as it helps the proper identification of the bank branches involved and avoids time consumption involved in searching process.
IFSC Code play 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- the hypothetical plaque that identifies a bank branch as a confirmation to the incoming monies that the same has been routed to the correct destination. We can compare this to a cattle rancher and his/her massive flock of cattle. Without a branding system, identifying individual members of the herd and accounting for all of them will be next to impossible.
How to Search for the IFSC Code of a Particular Bank's Branch?
IFSC codes are the basic unit of any online inter-bank money transfers in India and the surefire way to validate all such transactions. With the correct knowledge of IFSC codes, sending and receiving money online becomes simple and fast, as intended. Many resources are available online that help you to find IFSC code for the particular requested bank. let's face it- you are only likely to check upon the same when affecting an online transaction. In the similar vein, BankBazaar offers a comprehensive tool to help you indulge in a speedy and accurate IFSC Code search. How to access and utilize this tool? Read on
List of Popular Online Money Transfer Systems that Require IFSC Codes:
As has been noted before, wherever there is transfer of money through the online media in India, the principle of bank IFSC codes is definitely part of the play. Some of the popular online money transfer systems that utilize IFSC codes at the operational level include NEFT, RTGS and IMPS.
What is NEFT?
The full form of NEFT is National Electronic Fund Transfer and quite 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 that is equally popular amongst individuals as well as the corporate houses. Herein, IFSC codes must be suitably provided to ensure that money is accountably transferred from one bank account to another.
What is RTGS?
RTGS is acronym for Real Time Gross Settlement and as the name suggests, is a popular option for the speedy 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 the money isn't subjected to any deductions and/or expenditures). Herein again, IFSC codes act in a similar way as in the case of NEFT- helping to correctly identify the participating bank branches.
What is IMPS?
The Superman of the online money transfer world, IMPS, short for Immediate Payment Service is a relatively new option in India (founded, November 2010). The USP of this service is that money can be transferred instantly, 24x7 and across all popular Indian banks, through 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.
Anatomy of a 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 its genuinity and allow us to attach our complete faith in its applicability. The primary components of a typical bank cheque are illustrated as follows,
How to find IFSC Code in a Bank Cheque: On a typical bank cheque, the IFSC code is compulsorily listed though the location of the same on the cheque leaf will differ from bank to bank. In our 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.
How to find MICR Code in a Bank Cheque: This is displayed next to the cheque number on cheques offered by all banks in India.
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.