Indian Financial System Code commonly known as IFSC code is a unique 11 digit code issued by Reserve Bank of India (RBI) to all the bank branches.
This alphanumeric code, including both alphabets and numbers, is issued with the purpose of individual identification of each bank branch by the central bank.
IFSC code of two banks and even that of two branches can never be the same. This code is mandatory in the process of transferring funds from one bank account to another.
Without an IFSC code, none banking transaction could take place. Details regarding any bank branch can be extracted through its IFSC code.
This code system is only made for domestic use in India. Every type of bank, whether it is a public sector, private sector, or a foreign bank, each of them has an IFSC code.
IFSC Code of any Bank is Made Up of:
- The first four characters of the IFSC code are occupied by the bank’s name.
- The next character is always zero. It is the same in all the bank codes since it is a control number.
- The rest six characters of the code are digits. The digits will always be different for every branch of each bank. Sometimes these 6 characters at the end can also be alphabets.
Where to Find This Code?
It is very easy for anyone to find the IFSC code. It is present on the very first page of the passbook where the account number and personal details of the account holder are given.
In the checkbook, the IFSC code is printed on every single cheque leaf on the left-hand side.
If none of these two are available at the time of emergency, one can find it with the help of websites and portal, for this, the person should know the branch name and address.
If you have forgotten the branch’s name also then too you can find the code through websites that issue the IFSC code lists of every branch of each bank situated in a particular city.
This code is useful in electronic payment system applications like RTGS, NEFT, and IMPS.
Real-Time Gross Settlement is a system of transferring funds online from one bank account to another bank account. It is a real-time transfer system.
This system was launched on 26th March 2004. Currently, it covers 800 cities/towns around India.
Benefits of RTGS –
- The risk of credit is limited. As soon as the request is accepted by the central bank, the receiver instantly receives his/her payment.
- Since it is a real-time fund transfer system, all the transactions are settled in a real-time basis.
- The payments are securely ensured in financial market transactions.
National Electronic Fund Transfer is an electronic fund transfer system through which an individual, firm or corporate can transfer funds online.
There is no such minimum amount limit set to transfer funds through NEFT. Funds can be transferred through this system within hours.
But the actual time required to complete a transaction entirely depends on the time taken by the beneficiary bank to process the funds.
Benefits of NEFT –
- There are no chances of any mistake in this kind of fund transfer as it is highly secured and fast.
- There is no credit risk as the transactions are settled in the daytime.
- The service charges are very less.
- It is an eco-friendly process as paperless transactions take place.
Immediate Payment Service commonly known as IMPS is an instant fund transfer service. It was introduced in the year 2010 by the National Payments Corporation of India.
The bank usually charges Rs. 5 for an online fund transfer amounting up to 1 lakh and Rs. 15 for transferring funds between 1-2 lakh.
Benefits of IMPS –
- Funds can be transferred 24*7 with the help of this service.
- There is no need to register separately for accessing the IMPS services
Through which methods funds can be transferred with the help of the IFSC Code?
There are two methods of transferring funds with the help of this code –
- Through App
One can initiate a fund transfer through his/her phone by downloading the net banking app of his/her bank.
- Through SMS
Fund transfer can also be done by linking bank account with your phone by registering your number using the IFSC code.
Why IFSC Codes are so Important?
IFSC codes are very important especially in India to facilitate the process of online funds transfer from one bank account to another.
IFSC code along with the beneficiary’s name and the account number is required to perform the fund transfer activity.
It has become a very important tool for all banking services.
What Will Happen if the Wrong IFSC Code is Used?
If the person who is transferring a particular amount from his/her bank to another bank account and mistakenly enters the wrong IFSC code then the amount will get transferred to another person’s account and not to the beneficiary account.
That is why it is necessary for a person to correctly enter the receiver’s details to avoid such problems.
What are the benefits associated with IFSC Code?
- Using this code, one can transfer funds online which is a great option for saving time.
- Through this method, funds can be transferred immediately from anywhere with the help of a mobile, laptop, or computer which is very convenient.
- IFSC code is used to transfer funds online with high-security measures and there are no chances of fraud.
- By transferring funds online, one can contribute to saving the environment as the money will be transferred through electronic gadgets which will lead to a reduction in the use of paper also avoiding the printing cost.
- It facilitates communication as the message of reduction of money from the bank account of the sender and the message of receiving the credit in the bank account of the receiver will be sent to both by the respective bank branches.
- One can also make the payment of bills using these IFSC based electronic systems.
- This code helps in the identification of any particular bank branch.