You can transfer money through many ways. You can use NEFT, RTGS and recently launched UPI. For all of these ways, you have to give IFSC code along with the account number. What is this IFSC code and why is it required for fund transfer?
What is IFSC code
IFSC code is a short address of your bank’s branch. Actually, IFSC is the short form of Indian Financial System Code. So, It should be called only IFSC. But, commonly people use IFSC code for it so we are also going to follow this tradition.
An IFSC code is 11 digits alpha-numeric code of a branch of the bank. By this code, the RBI and our banking system identify the source and destination branches. In this way, The IFSC code facilitates interbank Electronic/online transfer.
The Reserve Bank of India, the central banking authority controls all the associated banks and banking affairs throughout India. The RBI issues the IFS Codes to the member banks. The RBI also lists and records the IFSC codes of all the participating banks.
IFSC code: Information
The IFSC Code is made of Two types of information.
- The first four Characters denote the name of the bank.
- The Fifth character is always 0 (zero). This is a control number which is same in all of IFSC Codes.
- The last six characters of IFSC code are usually digits. Sometimes these seven characters can be in alphabets as well. The last 6 digit/alphabets would be unique to a branch of the bank.
IFSC code: Examples
In digit format: You see here a cheque Of State bank of India GT road Kanpur branch. On the left hand of it, you see the bank logo and bank name. Just beside it, you see the bank’s branch address and also the IFSC code. You see here IFSC code is SBIN0001742. Here, first four characters SBIN indicate bank name (in this image State Bank of India). Its last 7 digits are the unique number of SBI GT road Kanpur branch (Fifth character is always zero ).
In alphabetic Format: You can see the cheque leaf of the bank of India CSJM university branch. Here, you see its IFSC code is BARB0CSUKAN. Its’ first four characters indicate bank name. /the fifth character is o (Zero as common or standard number). Last 6 digits show its branch of CSJM university Kanpur location.
Why is IFSC code important?
As you learned, the IFSC code is necessary to validate banking transactions. Banks and the financial organizations use the IFSC codes to transfer money from one account to another account.
As a customer, you should know the IFSC Code of your bank. To receive payment from another account holder you have to tell him/ her your IFSC code and account number.
When you add a beneficiary to transfer money, you have to give the IFSC code and account number of the beneficiary. The Reserve bank of India identify, monitor and authenticate the Transactions and Fund Exchanges Through IFSC codes. That is why RBI has mandated to publish the IFSC code on every cheque leaf.
Where Can You find IFSC code?
Yes! So easy it is. look on your bank passbook’s first page where your account and personal details are given. You would find IFSC code there.
Pull out your chequebook. Look at any cheque leaf. On the just left hand above side, you will find that branch’s IFSC code.
If you don’t have any of these, don’t worry! There are many websites and portal where you can find your branch’s IFSC code. You should only know the branch name and address for this.
If you have forgotten your bank’s branch’s name, don’t worry. Various portals give you the collective details of any city’s all branches located there.
RBI,s official website also offer such information. Here you can find IFSC code of any branch.
Only for Domestic Use
IFSC code system is made only for domestic use in India. Whether it is a public sector, private sector or foreign bank, every bank branch has an IFSC code. In the case of the international transaction, you will have to use SWIFT code. It is only for the active participant branches which are connected to SWIFT network. Generally, major cities some branches have this code.
However, new mode of digital payments has limited the role of IFSC. Through any UPI app, you can transfer money using only Virtual payment address. The BHIM app gives you the facility to pay only through the mobile number. USSD banking also gives you facility to transfer money using the mobile number. Aadhaar enabled Payments system uses the Aadhaar number instead of the IFSC and bank account number. So, fund transfer has become very easy now.