What is IFSC Code?
IFSC code or Indian Financial System Code is a unique 11-digit code which is alphanumeric. It is used for making an online transfer through NEFT, RTGS, and IMPS. An IFSC code of a bank is available on a cheque book. Reserve Bank of India (RBI) assigns these codes to all the banks and can be found on the RBI website.
Without the code, one cannot make any online or wire transfers. These codes do not change for any bank across the country, except in case of mergers. An IFSC code is unique and hence helps in identifying the branch of a particular bank. In case of invalid code, the transaction is not initiated, making it safe and error-free.
IFSC code is not similar to SWIFT code. IFSC code is used to transfer funds within India, while SWIFT code is used to transfer funds outside the country. These codes can be found on the bank cheque leaf, monthly statements, and passbook.
IFSC Code: How Does It Work
During an online transfer, a person needs to provide the bank account number along with the name and IFSC code of the beneficiary. This helps in ensuring that the transaction is being made to the right account. It can also be used to buy insurance and mutual funds online.
All the transactions are monitored by RBI’s National Clearing Cell and the IFSC code helps the RBI to do the transactions error-free. Apart from the cheque books, IFSC code can be found on the monthly bank statements. The code is different for each branch of the same bank.
For example, Punjab National Bank’s Vasant Kunj branch’s IFSC code is PUNB0411400. This means:
- PUNB is the name of the bank, Punjab National Bank
- The fifth character is the number 0 (zero).
- The rest is the number provided by the RBI to the Vasant Kunj branch.
During a transaction, in case the IFSC code is wrong the funds are immediately reversed into the sender’s account.
How To Search For The IFSC Code Of A Bank’s Branch
There are many online resources that can help you find the IFSC code of a particular bank. These resources provide the details such as the bank’s name, branch, IFSC code of that particular branch, bank’s address, and the bank’s phone number. We provide comprehensive data of all the banks’ IFSC codes. Here is how you do the search:
- Open the bank’s page and go to the IFSC code option on the website.
- Once on the page, you will need to select the bank, the state in which the bank is located, its district, and the bank’s branch.
- This search leads you the specific results based on your search criteria.
- The result will have the bank’s IFSC code, MICR code, official address, and phone number.
How Is IFSC Code Used To Make Bank Transfers
There are two ways of making bank transfers, one going to the bank and seeking teller’s help and two through online modes like NEFT, RTGS, or IMPS. In case of transferring the funds through bank, the sender needs to make a cheque in the name of the bank and provide beneficiary’s account details with IFSC code to the teller. One does not need to register the beneficiary in this case.
In the case of online transfers, it is important to have net banking services and register the beneficiary. The time of registration of a beneficiary may vary from bank to bank. However, the maximum time taken to register is 24hours. To register, along with the beneficiary’s name, bank name, branch address, account number, the person needs to have the IFSC code. In case the IFSC is not valid then the transaction will not be initiated.
How To Locate IFSC Code On Bank’s Cheque?
IFSC code is a unique number that is printed on a cheque book, which is compulsory. It is usually present in the top left corner of the cheque leaf. However, the placement of the IFSC code may differ from bank to bank. Each branch of a bank has a different IFSC code.
Importance Of IFSC Code
To avoid any kind of mistakes or errors in a transaction, RBI needs to keep a track of all the electronic transactions being made by the banks. IFSC code helps RBI to track these transactions within or outside the country.
For any bank account holder, it is important that they have the beneficiary’s IFSC code. Without the IFSC code, the account holder cannot initiate the online transaction. The code is important in all the online mode of transactions, NEFT, RTGS, and IMPS. The IFSC code system identifies the bank’s branch and provides a record of all the transactions taken place in the branch to the right account.
What Is RTGS?
RTGS or Real Time Gross Settlement is a mode to transfer funds online from one bank to another bank. Transfers done under this mode is instant and has no waiting time. RTGS is usually used when a transaction of high value has to be done and needs to be cleared instantly. The person needs to have the beneficiary’s name, account number, transaction amount and the IFSC code of the bank.
What Is NEFT?
NEFT or National Electronic Fund Transfer is another mode to transfer funds online. It is a very popular mode of transfer among corporates and individuals in India. Similar to the RTGS, NEFT also requires the beneficiary’s name, account number, transaction amount and the IFSC code of the bank. Transfers done under this mode is not very high and is cleared batch-wise.
What Is IMPS?
IMPS or Immediate Payment System is a mode transfer funds online and is available 24x7. The transfer is instantly through a person’s mobile phone, ATM and through net banking. This is a very safe, fast, and economical mode of transaction. This mode too needs IFSC code to do any transaction.