What is an IFSC Code?
IFSC (Indian Financial System Code) is an 11-digit alphanumeric code that uniquely identifies all banks and their respective branches participating in the online funds transfer process.
The IFSC Code is assigned to each bank branch by the Reserve Bank of India (RBI) to monitor the online transfer of money. The electronic or online transactions for transferring funds via NEFT (National Electronic Fund Transfer), RTGS (Real Time Gross Settlement) and IMPS (Immediate Payment System) cannot be initiated without a valid IFSC Code.
Features of IFSC Code
- Smooth online funds transfer: IFSC code enables convenient and hassle-free transfer of funds from one bank account to another. The use of IFSC Code is mandatory in facilitating all the electronic or online transfer of funds via NEFT, RTGS or IMPS
- Monitoring transactions: IFSC code is used by the RBI to keep a regular track of all the banking transactions, thereby minimising the possible chances of any discrepancy in the fund transfer process
- Unique identification: IFSC code helps in the unique identification of all banks and their respective branches, hence helping customers to avoid any possible errors
- Eliminating Errors: IFSC code helps users to carry out the fund transfer process securely, hence eliminating the possible chances of any fraudulent activity in the online funds transfer process
Format of IFSC Code
The 11 character IFSC code is a combination of 3 essential components:
- The first 4 characters represent the bank code
- The 5th character is a ‘0’
- The remaining 6 characters signify a specific branch code
Have a look at the below mentioned example of IFSC Code of State Bank of India, Delhi branch.
|State Bank Of India Code||Zero
||State Bank Of India Branch Code|
In the above mentioned example (SBIN0001707), the first 4 characters ‘SBIN’ represent the bank code of SBI, the 5th character is a ‘0’ and the last 6 characters ‘001707’ represent the branch code of Azadpur, Delhi.
Importance of IFSC Code
The significance and benefits of Indian Financial System Code (IFSC) are as follows:
- The code uniquely identifies a specific bank branch, hence helping customers to avoid any possible mistakes during the online transfer of funds via NEFT, RTGS or IMPS
- The customer need not visit the branch for any financial transfer, hence can opt for online money transfer with the help of IFSC Code. It is, therefore, a rather convenient and eco-friendly option
- All the online transactions including paying bills can be easily processed with the help of the IFSC code
- The code is used by the RBI to monitor all the online transactions performed by an individual hence eliminating the chances of any discrepancy in the fund transfer process
Why is IFSC Code required?
- IFSC Code is used to facilitate the electronic or online transfer of funds using NEFT, RTGS and IMPS
- The code helps the respective bank with IFSC Code as well as the RBI to track and seamlessly maintain all financial transactions which are carried out using online payment services
- The IFSC code is required to make an online payment to another bank so it can recognize the specific beneficiary's branch where the amount has to be credited
- IFSC helps in the unique identification of all banks and their respective branches enabling customers to avoid any fraudulent activity while facilitating online fund transfer
How to use IFSC Code?
Given below are the different uses of IFSC Code. It is to be noted that IFSC code helps to route the fund transfer to the concerned banks and their branches.
- Electronic Funds Transfer: With the help of IFSC Code, the user can transfer funds online instantly and conveniently. One needs to mention the beneficiary’s bank account number, bank branch, and IFSC code to carry out convenient online transactions
- Credit Card Bill Payments: IFSC code can also be used to make credit card bill payments. The transactions can be performed using mobile phones, tablets or laptops