Sending Money? Understand IFSC and MICR Codes First
IFSC vs MICR Code: Know the Difference Before You Transfer Money: Whenever you send money online or issue a cheque, IFSC and MICR codes are used by banks to process the transaction. Each code has a different purpose but both help ensure fast, accurate, and secure payments. Knowing the correct code helps avoid mistakes and delays in banking transactions.
What is an IFSC code?
IFSC, or Indian Financial System Code, is an 11-digit alphanumeric code that uniquely identifies every bank branch in the country. This code is also printed on your checkbook. Its structure is as follows:
-The first four letters represent the bank name.
-The fifth letter, always a ‘0’ (zero), acts as a separator.
-The last six letters identify the respective bank branch.
The IFSC code is primarily used in electronic fund transfer systems such as National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), and Immediate Payment Service (IMPS). This code ensures that your money reaches the correct bank and branch without error. The Reserve Bank of India provides IFSC codes for all banks on its official website, so customers can get accurate information.
What is a MICR code?
MICR, or Magnetic Ink Character Recognition, is a 9-digit numeric code primarily used in check clearing. This code is printed in magnetic ink on the bottom of the check, making it easily readable by machines. Its structure is as follows:
-The first three digits represent the city’s PIN code.
-The middle three digits represent the bank’s identity.
-The last three digits represent the branch code.
MICR technology makes check processing fast, secure, and error-free. This code is also recognized internationally, making banking operations more efficient.
What is the difference between IFSC and MICR?
The IFSC code is used for online fund transfers, while the MICR code is required for check clearing. IFSC is an 11-digit alphanumeric code, while MICR is a 9-digit numeric code. IFSC is a vital part of digital banking, while MICR plays a key role in the traditional check system.
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