You must have come across the term IFSC at some time. But do you understand why and how it is used? If you answered no, you’ve come to the correct spot. This page discusses IFSC codes in India.
If you have an account in India, you must supply the IFSC number for the bank that holds the account. The Indian Financial System Number, or IFSC, is an 11-digit alphanumeric code used by all banks in India for organising electronic payments, such as Real-time Gross Settlement RTGS payments and NEFT payments.
Obtaining the correct IFSC code, on the other hand, is critical to ensuring that your money comes on time. It is also critical that the funds are moved to the relevant Indian bank account. Read on to learn more about IFSC codes in India.
What exactly is the IFSC code?
Each branch is identified by a unique identifier known as the IFSC code. The Indian Financial System Code (IFSC) is an 11-character code seen on Indian checks and other bank paperwork. The IFSC code is the bank branch’s counterpart to the postal code, which specifies its specific location. Every bank branch has its own IFSC code, which allows consumers to easily transfer payments electronically. The IFSC code ensures that funds are sent to the correct account.
Electronic payment system applications like as real-time gross settlement (RTGS), NEFT, and Centralised Funds Management System utilise the IFSC code (CFMS). This money is required for transfers of funds from one account to another.
The first four letters of an IFSC code denote the bank, while the final six characters represent the branch. Zero is the fifth character.
For SBI, the first four numbers will be ‘SBIN,’ and the following six digits will be the individual branch code. SBIN0005943 is the IFSC code for the SBI branch at 23, Himalaya House, Kasturba Gandhi Marg, New Delhi 110001. So, in this case, the branch code is 005943.
If you wish to conduct a fund transfer between two branches, you must know the IFSC code of the receiving bank as well as the recipient’s account number.
How to Find the IFSC Code?
The IFSC code is easily searchable. For example, if you have a State Bank of India (SBI) account, the IFSC code will be written on your chequebook as well as the front page of your bank passbook. If you don’t have a chequebook or passbook, you may look up the IFSC code on the internet.
What is the significance of the IFSC code?
The IFSC code is useful for a variety of reasons. Consider the following:
When it comes to electronic money transactions, the IFSC code is crucial. It is a must if you wish to do any type of online banking transaction. It also helps to streamline the payment procedure across the many bank branches around the country.
Through IFSC numbers, the RBI keeps track of all bank transactions. This assists the RBI in detecting, monitoring, and authenticating fund exchanges during banking operations.
When doing a NEFT, RTGS, or IMPS transfer, the IFSC code offers an accurate picture of the bank branch where the receiver’s account is located.
Without an IFSC code, no one can conduct a money transfer. Furthermore, it is environmentally friendly because everything is done online and no paperwork is required.
IFSC codes help the country thrive by allowing a quick commercial procedure.
IFSC codes can also be used to pay for travel and bills/bookings.
Some Facts to Consider About IFSC Codes
There are some unknown facts about IFSC codes that you should be aware of. Consider the following:
The RBI assigns IFSC codes
You’re probably assuming that IFSC codes are generated by banks. This is a misunderstanding! The fact is that the Reserve Bank of India has total jurisdiction over IFSC codes. The RBI is in charge of allocating and producing IFSC codes for various banks around the country. It keeps track of IFSC codes for multiple bank branches to enable internet cash transfers as simple as possible.
You may also look up the IFSC code of any bank by visiting the RBI’s official website. The link in the website’s footer menu will lead you to a page where you may select your favourite bank from a drop-down menu. Then, input the branch name to obtain the IFSC code of a specific branch in India.
Inimitability
Each bank has its own IFSC code. For example, you may associate it with the train’s PNR number, which is used to ensure that no two people purchase the same ticket on the same train. These codes are produced to facilitate quick and easy electronic payment transfers. Even RTGS and NEFT transactions are done only on the basis of the account number and IFSC code.
The RBI has complete control over the IFSC code.
The Reserve Bank of India has exclusive responsibility for establishing, changing, allocating, or cancelling IFSC codes. The Reserve Bank of India does not usually update the IFSC code, although it does have the right to do so. If the IFSC code changes, the new code is simply obtained from the bank. Account holders must request a new chequebook with the updated IFSC code.
Prone to mistakes
You could even make a mistake and input the incorrect IFSC code. The transaction cannot be executed because the IFSC code is incorrect. In certain circumstances, the funds are returned to the sender’s account. The likelihood of the money being credited to the sender’s account is quite low. Although there are methods for recovering the funds, the procedure is time-consuming.
Read Also: Credit Card and Its Benefits in India
