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What is IFSC code, Meaning, Importance & how it works

Trends - 23 Mar, 2024

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What is IFSC Code?

IFSC is Indian Financial System Code. The IFSC is an 11-character alphanumeric code which every bank branch in India is required to have. It is a kind of a unique address in which the branches receive the money in India used for the online fund transfers using NEFT, RTGS, and IMPS. This is the right IFSC code to make the money enter into the account of whom we wish to pay from our home. You can locate your IFSC code on your cheque book or bank passbook, or look on your bank website.

How does the IFSC code affect your funds transfer?

IFSC codes (or Indian Financial System Codes) are 11-digit alpha-numeric codes used by banks within the NEFT network to identify their branches.

How to find a IFSC Code

Here are three simple ways to find your IFSC code:

Look for it in your cheque book: At the top left corner IFSC code will be printed by your branch address.
Internet banking: A large number of banks facilitate you with the ability to locate your IFSC code by the way of logging in with your net banking account.
Call your bank: You can call your bank, and their customer care executives would be more than happy to help you with your IFSC code.

IFSC code: what do they mean?

There are several electronic payment systems which use IFSC codes, including RTGS, NEFT, and CFMS. Banks require these codes for fund transfers between accounts. Every branch has a different code, and no two banks (even branches belonging to the same bank) will have the same code.

An IFSC code represents the bank with the first four digits and the branch with the last six digits. The fifth character is zero.

Example of SBI IFSC Code

An IFSC code issued by the State Bank of India (SBI) contains four letters ‘SBIN’ followed by six digits of a branch code. For example, SBI’s branch at 23, Kalyani Park, Baner, Pune 411045, has IFSC code SBIN0111100. Its branch code is 111100.

To add beneficiaries, you need to know the IFSC code of the bank. The RBI provides a list of banks through their website that offer NEFT/IMPS/RTGS services, including their IFSC codes.

Getting the IFSC code of your desired bank branch has never been easier. You just need to select the name and location of the bank branch you wish to find, and after clicking, the IFSC code will appear on your screen.

This is the RBI portal for checking the IFSC code of all Indian banks https://www.rbi.org.in/Scripts/IFSCMICRDetails.aspx

The Importance of IFSC Code?

IFSC is an acronym for Indian Financial System Code and it is a vital component of any of the online fund transfer systems operated in the country. A sort code is an 11-digit number that refers to a specific bank branch. It does much like a mailing address in making certain your financial aid goes to the right place. With IFSC, the following benefits can be enjoyed:

Quick and Accurate Transfers: If you use the correct IFSC, the money will be delivered to the right bank branch only and in a timely manner. Say goodbye to typos, the fear of a wrong account!
Quick Transactions: Internet money transfers executed via IFSC are fast and save a lot of time as compared to the dull conventional methods.
Secured Transactions: A final measure that IFSC results in is that it provides a much more convenient strategy for online banking whereby you may be sure your hard earned money will never be in the incorrect hands.

Therefore, whenever you are making an online money transfer remember the IFSC code, for a seamless and a safe transaction.

How does IFSC Code work and its format?

IFSC code is a unique address for your bank branch, which is required for all online money transfers in India. The 11-digit code that helps identify which bank the account is held in. Here is how it works: The first 4 letters represent your bank (- like SBI / HDFC / ICICI) The fifth digit is always 0. The last six digits are used to identify the particular branch of the bank. While doing an electronic transfer, you will have to enter the IFSC of the recipient along with their account number. This is the code when you apply to transfer money so the money goes to the right place quickly and safely.

How does IFSC impact your business?

In essence, an IFSC code is a code that is used to facilitate easy, secure, and accessible online fund transfers. Here are some of the advantages it offers:

Transacting with ease: With the IFSC, fund transfers between banks are seamless and error-free. NEFT, RTGS, and IMPS are some of the modes of financial transactions that RBI can track, monitor, oversee, and authenticate from the identification code.
The identification of banks: It helps in determining which bank branch to transfer money to, and how much to transfer.
Error-free: By requiring an IFSC for fund transfers, Net Banking has become a highly secure platform; an IFSC reduces the chances of fraud, errors, and theft during fund transfers.
Easily transfer funds: IFSC has simplified the process of handling financial transactions. Fund transfers can be done within minutes, anywhere in the world, from any corner of the globe. This has been a boon for those in need of funds to tide them over until their emergency fund is available.
Eco-friendly Banking: By using IFSC, account holders contribute to the environment by transferring money in a paperless manner.
Is it possible to change the IFSC: There is typically no change, revision, or updating of the IFSC. However, when a bank merges or reorganizes, it changes its identification code. Account holders will receive a new code. In our opinion, this is a necessary step so that the online financial transaction can be completed successfully and reach the beneficiary’s account without a hitch.

Why IFSC Code is Required to Transfer Money

With IFSC codes, customers are able to transfer money from one account to another quickly and easily through three primary electronic fund transfer systems known as NEFT, RTGS and IMPS.

RTGS:

Fund transfers via RTGS (Real Time Gross Settlement) are fast and convenient, allowing money to be sent and received instantly once it has been initiated by the remitter.
Unlike batch-based systems, transactions are processed individually.

IMPS:

A real-time EFT method. Instant payment service lets you deposit funds directly into an account of your payee or beneficiary whenever you wish, 24 hours a day, seven days a week.
The primary advantage of IMPS over RTGS and NEFT is that it is available 24 hours a day. IMPS transfers can be initiated via SMS, ATMs, mobile banking, internet banking, etc.

NEFT:

NEFT is a system that enables you to transfer money across bank accounts. Since it is monitored by the Reserve Bank of India. It is secure and hassle-free.
For NEFT transfers, you will need the account number of the payer, the account name of the receiver, the name of the bank branch, and the IFSC code of the bank branch you wish to send funds to.

IFSC code search: how to find it?

The IFSC and MICR codes are visible on your cheque book page. They are also available on the first page of the passbook you receive from the bank branch where you opened your account.

IFSC Code vs MICR Code differences?

IFSC CODE	MICR CODE
Transacting electronically between accounts is made possible by it.	Cheques are processed faster by using this code
This code has 11 digits	This code has 9 digits
Bank names are indicated by the first four characters	City code is initiated by the first three characters
Bank location can be inferred from the following characters	A bank code follows the preceding characters

How to transfer money with IFSC code?

IFSC code is similar to the address of a branch for electronic transfers in India. So, to transfer money through an IFSC code, you will generally follow these steps:

First, log in to your bank account via their online platform or mobile app.
Click on new transfer and select either IMPS or NEFT (IMPS for transferring instantly and NEFT for transferring in batches). Here, type in their bank account number and IFSC code that either you already have or you can get from their bank account details.
After choosing the transfer option, you will need to go through various screens with information until making the final transfer at which point be extra careful and triple-check all details, just like with any money transfer.
The transfer will then arrive in the bank of the recipient and they will have the funds in their account.

Details of Fund Transfers Using IFSC

IFSC in action:

You start a fund transfer via your bank’s internet banking platform. The platform asks you to fill in the beneficiary’s details, including their IFSC code. The IFSC code identifies which branch the receiver’s account is in. After you verify the information, the funds are sent electronically to the beneficiary’s account. This ensures clear and accurate transfers between banks.

Bottom Line:

With the IFSC code, Internet Banking in India becomes quicker, more convenient, and more secure, while indirectly contributing to the environment as well.

FAQ’s

IFSC code search?

IFSC codes of all Indian banks can be found on the RBI website – Click Here

IFSC code Indian bank?

You must first glance at the IFSC code to see what it looks like. The first four letters should be ‘SBIK,’ and the first six digits should mean which branch you are at. For instance, SBI Bank’s IFSC code on 1201, Amar Plaza Business Park, Ground Floor, Pune 411045 is SBIK00P0045.

What is the meaning of IFSC codes?

Multi-bank transfer systems use the IFSC code to identify the bank and branch of a particular account and the account itself.

Are IFSC codes required?

Yes, The IFSC code is mandatory for any bank-to-bank transfer via NEFT, RTGS, or IMPS.

By what method can I check my IFSC code?

Your IFSC code is located on your bank account number. IFSC codes belong to banks and cannot be used for personal accounts.

What is the IFSC Code of a bank?

IFSC code (Indian Financial System Code) is a unique 11-digit code used for online fund transfers in India.

Is the IFSC code the same as the branch code?

No, the IFSC code is different from the branch code. Branch code identifies a specific bank branch, while IFSC code identifies a bank branch uniquel

How do I find my IFSC code with my account number?

You can find your IFSC code in your bank passbook, cheque book, or online bank statement. You can also use your bank’s website or mobile app to find your IFSC code.