Learn about how MICR and IFSC codes are used to easily transfer funds online and make payments through cheques.
Accessing banking and financial services has become extremely easy nowadays. You can access your bank account details and perform financial transactions from a plethora of platforms. In fact, you don’t even need an internet connection to perform some basic transactions, all thanks to the reforms introduced by the government to strengthen the banking and financial industry.
Netbanking and the widespread adoption of smartphones have worked positively for the industry. For example, if you want to transfer money to a friend or family member in need, you no longer need to visit a branch and then make a deposit in cash. Instead, you can take advantage of the online payment systems. You can opt to use National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS) or Immediate Payment Service (IMPS) and transfer the required funds online. The Indian Financial System Code (IFSC) enables such online transfers.
In case of NEFT transactions, the money is deducted immediately from the bank account of the sender and is credited to the bank account of the receiver in 1 – 2 working days. In case of RTGS and IMPS transactions, the money is not only deducted immediately from the bank account of the sender but is also credited to the bank account of the receiver almost instantly.
Additional Reading: Getting Started with Money Transfers
IFSC codes explained
An IFSC code is an alphanumeric code (11 characters) that plays a very important role in the financial system of our country. It helps in identifying the bank and the particular branch of that bank. It is used to facilitate online transfers through RTGS or NEFT. The first 4 characters represent the name of the bank and the last 6 characters represent the branch of that bank. The fifth character is 0 and it is reserved for future use. For example, ICIC0000021 is IFSC Code for Gurgaon branch of ICICI Bank.
In this case, the alphabetic code ICIC represents the bank and the numeric code 0000021 represent the Gurgaon branch of the bank. Thus, the IFSC code is very important in processing online fund transfers as it helps in accurately identifying the bank account that is to be credited and the account from which the money is to be debited.
Fast transfer of funds is now possible because of this alphanumeric code as participating banks can be identified electronically, reducing the turnaround time for processing such transfers. Although fund transfers through banks are becoming more and more popular, the use of cheques as a means of payment is still quite common.
This is where the MICR code plays an important role. In the case of a cheque, payment amounts are deducted from your bank account once the cheques are processed. The Magnetic Ink Character Recognition Code (MICR Code) helps in the recognition, processing, and clearance of such cheques.
The Importance of MICR Codes
Similar to the IFSC Code, the Magnetic Ink Character Recognition Code (MICR code) also plays an important role in the financial system of our country as it helps in processing payments made through cheques. As its name suggests, it is part of a character recognition technology that is used by the banking industry for clearing and processing cheques.
The MICR code is provided on each cheque leaf and is printed at the bottom of each cheque leaf. It is a 9-digit numeric code that helps in identifying the bank, the branch of the bank where the account is maintained, and other details needed to process cheque payments. The use of MICR Code has helped reduce the time taken to clear cheque payments and has also helped bank employees get rid of the burden of entering details of cheques manually for the purpose of processing them. Unlike barcodes, the characters present in an MICR Code can be easily read by humans without a lot of effort.
Additional reading: All about MICR codes
With the help of MICR and IFSC codes, you can easily transfer funds online and make payments through cheques. These codes are a boon to both customers and financial institutions. The MICR Code is printed on the bottom of every cheque and is used by financial institutions. In the case of an online fund transfer, you will need an IFSC code. You can usually easily find this on the website of your bank or on any third-party financial website.
Psst…you don’t have to worry! We have all the IFSC and MICR codes consolidated in a directory just to make banking transactions simple for you.
Click here to use our IFSC and MICR Codes Directory
Hai !! am having doubt in MICR code, how to find MICR code !! I mean through web we can’t get MICR code for all the branches. For example BOB – Attur branch. MICR code for this branch.
Hi Aishwarya Vasu, Thanks for writing to us. You can look for all IFSC and MICR codes in our directory. If you are still unable to find the code that you need, please contact your bank. Let us know if we can help you with anything else, we’d be happy to assist you. Cheers, Team BankBazaar
Indian Budgetary Framework Code (IFSC) codes are doled out to each and every bank in India by the RBI. The Indian IFSC Monetary Framework Code is being utilized as a tending to code. The code is a 11 Digit Alphanumeric code with the beginning four characters speaking to the bank code, the following character is a control character, and the remaining characters are to distinguish the Branch.
Hi David,
Thanks for the valuable information.
Cheers,
Team BankBazaar
hi
thank you for sharing detailed information on ifsc code system.
Hi Vikas,
Thank you for your valuable feedback. Please keep reading our blog for more on personal finance.
Cheers,
Team BankBazaar
Thnaks for the clear and brief information on IFSC code… i surely updated my knowledge and information on the ifsc codes… thanks for writing this blog… keep updating
Hi Khyati,
Thanks for your valuable feedback. Keep reading our blog for more on personal finance.
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Team BankBazaar
IFSC codes are maintained by RBI (Reserve Bank of India) and it has complete list of all the branches of all the banks that provide online fund transfer facility to their customers.
Many people will get lot of benefits by reading this kind of informational stuff .Thank you so much for this .
Hey there!
We’re glad we could be of help. Have a nice day!
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Team BankBazaar
This is absolutely exceptional. Even though variety of article on this topic, this article carries a number of the treasured points which had been never be read in other articles.
Hi Pincodezone,
We appreciate your feedback. Thanks for reading!
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Team BankBazaar
thanks for the info
Hey there,
Thanks for stopping by. We’re extremely glad to know that you found our article helpful. Please keep reading our blog for more insight into the world of personal finance.
Cheers,
Team BankBazaar
Hi,
Thanks for the great information about IFSC Codes. I have also found the blog about Pin codes and IFSC codes where anyone can update their knowledge. Keep posting !
Hi Amit,
Thanks for stopping by. We’re extremely delighted to know that you found our article helpful. Please keep reading our blogs for more such insights into the world of personal finance.
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Team BankBazaar
Dear Bank Bazaar Team, I was looking for this info and luckily come across this page.. this is quite informative article , explained the concept in depth really well. Keep it up with your great content..
I found one good website where we can find all India Bank Branches, IFSC codes, branch addresses, phones nos and more with just one click. might be useful for someone ifsc.financialplanet.in
Hi Jarnail,
We’re glad you found our post useful. Keep reading our blog for more insights into the world of finance.
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Team BankBazaar