PREENON BHATTACHERJEE, PRAMOD KR SETHY
IFSC is the short form of the Indian Financial System Code, which is uniquely assigned to each and every bank in India to help users transfer funds easily. IFSC Code is 11 characters long which is divided into 3 parts.
First 4 characters represent the Bank Code
The 5th character is always 0 (Zero).
The final 6 characters represent the specific branch code.
Who assigns the IFSC Codes?
The RBI(Reserve Bank of India) assigns this unique code to every single bank so that they can give the facilities of electronic or online fund transfers like NEFT (National Electronic Fund Transfer), RTGS (Real Time Gross Settlement) and IMPS (Immediate Payment System) to users.
Importance of IFSC Code
This is the only code that is used to identify a particular bank during any type of fund transfer. Even at the time of online bill payment using UPI payment methods or a debit or credit card the IFSC code is used. RBI uses this code to monitor the fund transaction between each and every bank. Not only in online banking but also in offline banking like cheque payment the IFSC code is used.
MICR is the short form of the Magnetic Ink Character Recognization, which is uniquely assigned to each and every bank in India to help users to participate in the Electronic Cleaning System. MICR Code is 9 characters long which is divided into 3 parts.
First 3 characters represent the City Code
The next 3 characters represent the bank code.
The final 3 characters represent the specific branch code.
What is the use of MICR Code?
MICR Code is used by banks to identify the paper-based documents, especially cheques. This is also used in online fund transactions like NEFT & IMPS along with IFSC code. A MICR reader is used to read to MICR code placed on the banking paper documents like a cheque.