With the demonetization & then fresh currency issuance in India during the last couple of months, there has been a major boost to the cashless transactions in our country. At times, people are forced to move towards the paperless banking even against their wish. Thus, 8th November 2016 has marked an important day in the Econnomic History of India for a major step towards digitalization of financial transactions, be it the banking way, the ewallet way or any other innovative methods of transaction!
Online payments in India can be done through Netbanking, NEFT, RTGS, IMPS, Credit and Debit Card, Electronic Clearing Methods, mobile banking, -wallets introduced by banks, NBFCs as well as mobile service providers in India.
All these modes of payment need to be linked to the home branch savings bank account of the individual with reference to its IFSC code.
What is IFSC Code ?
IFSC Code is the short cut of Indian Financial System Code. It consists of 11 characters in an alphanumeric combination. IFSC of any branch of any bank in India is unique and the identity of the bank can be found through only its IFSC. No other information about the bank, branch, address, etc. is needed for online money transfer once the IFSC code is correctly entered. This information regarding IFSC is often not available when you apply for a savings account, but becomes very important when you already have access to a savings account.
The Reserve Bank of India or the RBI is the Central Banking Institution, which controls the monetary operations in India. Thus, RBI issues the IFSC code to each bank and its branch in India.
How does an IFSC Code look like?
The IFSC code is a 11 character code which is alphanumeric. It typically looks ABCD0123456 where in:
Wherein the first 4 digits are SBIN represent State Bank of India, 5th character is zero and the last 6 characters, i.e. 018382 would help you identify that this code is of SBI, Bangalore, its address, contact details, branch timings, etc. The data is readily available online and can easily be searched.
Why do banks give so much of importance to IFSC?
In today’s virtual world with the press of a button , everything can be transacted online. Whether it is shopping,movie booking ,events booking, purchase of groceries ,etc., when we have so many virtual transactions, the use of IFSC code for transfer is of paramount importance. IFSC is used in NEFT and RTGS.
NEFT is the online mode of payment used by an individual or any organization to make an electronic transfer to another account. Amount transferred thru NEFT is transferred in batches to the recipients by the banks.
RTGS or Real Time Gross Settlement is the electronic gateway, which enables account to account transfer in real time. So this can transfer money from one account to another immediately, while NEFT is settled in batches.
How is the IFSC Code helpful?
When we want to transfer money from one bank to another bank through RTGS, NEFT or IMPS , these being transfers within the banking system, the IFSC acts as a unique identifier. The common link to the transfer of funds is IFSC code.
There are has been a significant transformation in the economy since introduction of the online route and because of this, massive financial transactions have occurred across the banking system. The traffic of funds transfer can be handled /eased only through IFSC code which is already prevalent in our banking system.
Points to note about the IFSC Code.
It is also better to know the interdependent terms which are commonly used along with IFSC.
IFSC & MICR- Many a time people get confused with these common terms which are used for transferring the funds. MICR-Magnetic Ink Character Recognition. MICR is a 9 digit number representing city, bank & branch. The code which is introduced by RBI acts as a safety of the negotiable instrument i.e. the cheque. Whereas , the IFSC code helps in directly transferring the amount to the beneficiary account. The IFSC code helps in the instant transfer of money.
IFSC & SWIFT Code- With the Globalization and the boost to the import and export trade & more people are settling abroad, we need to understand the SWIFT code. SWIFT - Society for Worldwide Interbank Financial Telecommunication, it is a 11 character code , first 4 characters are bank code and next 4 are alpha country code,next 5 codes are optional with location and branch code. When we want to transfer the money abroad SWIFT code is helpful.
The main difference is IFSC code helps in the funds transfer within India i.e. domestically, whereas the SWIFT code helps in money transfer abroad. Indian economy is the sixth largest economy in the world measured by GDP, this coincided with major changes in the world economy . All these IFSC, SWIFT codes and various modes of bank transfer, which are introduced by the RBI,helps the citizens to get hassle free, quick and secure access to funds in their savings account within India.
Online payments in India can be done through Netbanking, NEFT, RTGS, IMPS, Credit and Debit Card, Electronic Clearing Methods, mobile banking, -wallets introduced by banks, NBFCs as well as mobile service providers in India.
All these modes of payment need to be linked to the home branch savings bank account of the individual with reference to its IFSC code.
What is IFSC Code ?
IFSC Code is the short cut of Indian Financial System Code. It consists of 11 characters in an alphanumeric combination. IFSC of any branch of any bank in India is unique and the identity of the bank can be found through only its IFSC. No other information about the bank, branch, address, etc. is needed for online money transfer once the IFSC code is correctly entered. This information regarding IFSC is often not available when you apply for a savings account, but becomes very important when you already have access to a savings account.
The Reserve Bank of India or the RBI is the Central Banking Institution, which controls the monetary operations in India. Thus, RBI issues the IFSC code to each bank and its branch in India.
How does an IFSC Code look like?
The IFSC code is a 11 character code which is alphanumeric. It typically looks ABCD0123456 where in:
- First 4 characters of the code represent Bank Code,
- Fifth characters is Zero which is reserved for future utility
- Next 6 characters represents Branch code, making the entire IFSC a 11 character code.
Wherein the first 4 digits are SBIN represent State Bank of India, 5th character is zero and the last 6 characters, i.e. 018382 would help you identify that this code is of SBI, Bangalore, its address, contact details, branch timings, etc. The data is readily available online and can easily be searched.
Why do banks give so much of importance to IFSC?
In today’s virtual world with the press of a button , everything can be transacted online. Whether it is shopping,movie booking ,events booking, purchase of groceries ,etc., when we have so many virtual transactions, the use of IFSC code for transfer is of paramount importance. IFSC is used in NEFT and RTGS.
NEFT is the online mode of payment used by an individual or any organization to make an electronic transfer to another account. Amount transferred thru NEFT is transferred in batches to the recipients by the banks.
RTGS or Real Time Gross Settlement is the electronic gateway, which enables account to account transfer in real time. So this can transfer money from one account to another immediately, while NEFT is settled in batches.
How is the IFSC Code helpful?
When we want to transfer money from one bank to another bank through RTGS, NEFT or IMPS , these being transfers within the banking system, the IFSC acts as a unique identifier. The common link to the transfer of funds is IFSC code.
There are has been a significant transformation in the economy since introduction of the online route and because of this, massive financial transactions have occurred across the banking system. The traffic of funds transfer can be handled /eased only through IFSC code which is already prevalent in our banking system.
Points to note about the IFSC Code.
- IFSC code can be found in a cheque leaf, along with the other details of the account holder. If they want to check the their own branch IFSC code.
- Other Banks IFSC code can be found on RBI official weblink.
- Entire IFSC codes of the branches can be located across the country in the particular bank weblink.
- Easy and quick transfer of funds by using IFSC code.
- No scope for error, as the funds will be deposited to the particular bank and account.
- RBI has advised all the banking firms which are under its umbrella to issue to IFSC code. IFSC code is rolled into the system to identify the route , monitor and track every transaction.
It is also better to know the interdependent terms which are commonly used along with IFSC.
IFSC & MICR- Many a time people get confused with these common terms which are used for transferring the funds. MICR-Magnetic Ink Character Recognition. MICR is a 9 digit number representing city, bank & branch. The code which is introduced by RBI acts as a safety of the negotiable instrument i.e. the cheque. Whereas , the IFSC code helps in directly transferring the amount to the beneficiary account. The IFSC code helps in the instant transfer of money.
IFSC & SWIFT Code- With the Globalization and the boost to the import and export trade & more people are settling abroad, we need to understand the SWIFT code. SWIFT - Society for Worldwide Interbank Financial Telecommunication, it is a 11 character code , first 4 characters are bank code and next 4 are alpha country code,next 5 codes are optional with location and branch code. When we want to transfer the money abroad SWIFT code is helpful.
The main difference is IFSC code helps in the funds transfer within India i.e. domestically, whereas the SWIFT code helps in money transfer abroad. Indian economy is the sixth largest economy in the world measured by GDP, this coincided with major changes in the world economy . All these IFSC, SWIFT codes and various modes of bank transfer, which are introduced by the RBI,helps the citizens to get hassle free, quick and secure access to funds in their savings account within India.
EmoticonEmoticon