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.
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:
In the above mentioned example (SBIN0006531), the first 4 characters ‘SBIN’ represent the bank code of SBI, the 5th character is a ‘0’ and the last 6 characters ‘006531’ represent the branch code of Delhi Gate, Delhi.
The significance and benefits of Indian Financial System Code (IFSC) are as follows:
Why is IFSC Code required?
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.
Methods to transfer money by using IFSC Code
The use of IFSC Code is mandatory in the electronic or online transfer of funds using NEFT, RTGS and IMPS. It is to be noted that the NEFT and RTGS payment services were introduced by the Reserve Bank of India (RBI), while the IMPS service was introduced by NPCI (National Payments Corporation of India). The 3 main payment service through which online transfer of funds is initiated include NEFT, RTGS & IMPS.