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Acronym for Indian Financial System Code, IFSC is a unique 11-digit alphanumeric code used to transfer funds online through NEFT, RTGS, and IMPS transactions. The Reserve Bank of India allocates the IFSC code of each bank branch. Typically, the code is found on the cheque book provided by the bank. In the case of net banking money transfer, the IFSC code must be entered to initiate the transfer. Unless there is a merger, banks do not modify or change the IFSC code.
Some features of IFSC are listed as follows:
Seamlessly online funds transfer:
The IFSC code makes the transfer of funds from one bank account to another comfortable and hassle-free. It is mandatory to use the IFSC Code to facilitate all electronic or online transfers of funds via NEFT, RTGS, or IMPSS.
RBI utilizes the IFSC code to keep a regular track of all the banking transactions. Thus, lessening the possible chances of any discrepancy in the fund transfer process
IFSC code aids in the unique identification of all banks and their respective branches, therefore helping customers to avoid any possible errors.
IFSC code aids users to perform the fund transfer process securely, hence eliminating the possible chances of any fraudulent activity in the online funds transfer process.
The points listed below emphasize the significance of the IFSC code.
– Using IFSC code, it is easier to find or search banks Unique Identification
– It helps remove any discrepancy in the process of transfer of funds. Remove Errors
– The code is utilized in electronic payment tools such as RTGS, IMPS, and NEFT. Hassle-Free Electronic Payments
The first four characters in the IFSC code are alphabets that signify the name of a bank. Therefore, with the same four letters, the code of each branch of the same bank will begin. The fifth character corresponds to zero. Digits or numbers that indicate the branch code are the remaining six characters. This is the aspect that makes an IFS code special.
The IFSC code of State Bank of India, Delhi branch:
In the example described above,the first 4 characters ‘SBIN’ represent the bank code of SBI, the 5th character is a ‘0’ and the last 6 characters ‘001707’ represent the branch code.
Now, let's understand how IFSC works.
When a fund transfer to a particular payee is initiated, the account number and branch-specific IFSC code must be provided. Once the sender gives this information, the money is transferred to the account holder, and IFSC helps prevent any mistakes in such transactions.
The IFSC code can also be used to buy the insurance and mutual funds through net banking, in addition to fund transfers. All transactions are tracked by the National Clearing Cell of the Reserve Bank of India (RBI), and the IFSC code allows the RBI to keep track of transactions and conduct transfers of funds without mistake.
You can also see the IFSC code on your cheque book or bank passbook. In the monthly account statement, their bank branch IFSC code can also be found. The IFSC code is novel for each bank and branch.
Through the use of three main fast payment systems in India, such as IMPS, NEFT, and RTGS, the IFSC code is used to transfer funds online. These three fund transfer techniques can be used through net banking or mobile banking.
NEFT (National Electronic Fund Transfer)
NEFT is an electronic payment system used in India for the rapid transfer of funds between banks. The fund transfer time can fluctuate between 1-2 hours under NEFT. NEFT's main advantages are that the minimum and maximum amount of transaction is not limited and is provided by all banks in India. The transfer of money occurs on weekdays from 8 AM to 6:30 PM and 8 AM to 1 PM on working Saturdays. There are NEFT fund transfer charges that vary from bank to bank. Depending on the transaction size, the charges are in the range of Rs. 2.5 to Rs. 25 plus GST.
RTGS (Real Time Gross Settlement)
RTGS is one of the fastest interbank money transfer facility in India. It enables the transfer of money within 1 hour on a real-time basis. There is a minimum transaction limit of Rs. 2 lakh, as per RBI. This facility is available at bank branches, which are permitted by RTGS. The fund can be transferred from Monday to Friday and on working Saturdays between 8 AM and 4 PM. Depending on the transaction size, a charge of up to Rs. 60 plus GST is imposed on the transfer of funds.
IMPS (Immediate Payment System)
IMPS is an electronic money transfer facility where money is transferred within a few seconds to the beneficiary's account. The funds transfer through IMPS is safe as it uses a two-step authentication process to conduct transactions. There is no minimum limit on the transfer of money, but for various banks, the maximum limit is different. When clients have a mobile banking or internet banking service, this facility is open. The fund can be transferred 24*7 hassles free even on bank holidays. Depending on the amount of the fund transfer, the charges added to this facility are up to Rs. 15 plus GST.
How do I find an IFSC code from account number?
The IFSC code is common for all accounts in the same branch of the bank. It is an 11-digit alphanumeric code where the bank name is represented by the first 4 characters of the IFSC code, the fifth character is 0 and the last 6 numbers identify the bank branch code. The IFSC Code can be found on the bank's cheque and passbook.
Is IFSC code sharing safe?
Each bank branch's IFSC Code is unique and is necessary in India for the transfer of funds through the online mode. The unique code given to each bank guarantees the security of the transfer. But, no one may misuse the IFSC code for fraud or theft.
Is Swift code same as IFSC code?
No, both the Swift Code and the IFSC Code are not similar. The IFSC code is used to transfer funds within India via payment systems such as IMPS, NEFT and RTGS, and the Swift Code is used internationally for fund transfers between different banks.
Is branch code and IFSC code are same?
The IFSC code isn't similar to the branch code. The Indian Financial System Code (IFSC) consists of eleven characters and is used to describe the branch and the bank. Although the branch code is part of the IFSC code, it is not equivalent.
Is IFSC code is equivalent to RTGS?
The IFSC code comprises eleven characters and is used to identify the bank and its branch. Whereas, RTGS is one of the main payment and settlement systems in India. To conduct any such EFT, IFSC is required.
Can we stop the NEFT payment process?
A NEFT payment cannot be stopped once started. In the event that any of the details are inaccurate (account number/IFSC code), the funds are reversed to the account from which the payment was initiated.
Will the IFSC code changes, if a bank branch is changed?
No, if the location of a branch of a bank is changed, it will not change the IFSC code. If the bank account is transferred from one branch of the bank to another, the IFSC code will be updated only then.
From my bank passbook, can I access the IFSC code?
Yeah, from the bank passbook, you can access the IFSC code. Banks must print the IFSC and MICR codes prominently on the passbooks, account statements and cheques issued by them, as per the Reserve Bank of India Directive.
If one uses the wrong IFSC code, what happens?
If the remitter enters incorrect IFSC code when making the fund transfer, money from the remitter's account will be debited but will not be credited to the beneficiary's account due to incorrect IFSC Code.
If someone has a bank account number and some other individual's IFSC code, can the person do any harm?
No, the individual will not do any harm in any such situation, since the account number and IFSC code are primarily intended to deposit money into the account and not to withdraw any amount.