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Whenever we open a bank account, you are provided with an IFSC code. And whenever we have to provide our bank details to someone, it is important that IFSC code is provided as well. But have you ever wondered what IFSC code is all about? And why is it so important in all bank details and transactions? If you are wondering about the same, then delay not. Our blog on IFSC code will answer all your questions.
IFSC code is an abbreviation for Indian Financial System Code. This code is assigned by Reserve Bank of India (RBI) to all the branches of the bank. Every branch of a bank extending NEFT services to its customers is allotted this unique 11 characters long number. This code is a mandatory prerequisite for online payment facilities like
This 11 characters long code is cryptic in nature. It is made up of several things like:
If you want to know the IFSC code of your branch, you can either check the cheque book issued to you by the bank or you can also check the passbook of your account. You can also go to the official website of the Reserve Bank of India to know the IFSC code of your branch. There is a less probability of any bank changing their IFSC code. But recently, the State Bank of India changed the IFSC code of all its branches across the country. The IFSC code can also be used if you are buying mutual funds or any insurance policy through net-banking.
The importance of IFSC code can be ascertained by looking at the points mentioned below:
In the financial world, there are two major tools which are used for internet banking and they are NEFT and RTGS. For using these payment gateways, IFSC (Indian Financial Code State) is mandatory. It recognises every branch of all the banks uniquely. Resultantly, making it the most reliable source of transferring funds online.
As mentioned above, this code is allotted by the Reserve Bank of India and is a combination of alpha-numeric characters. To understand the code better, let’s look at the example below:
Let’s take HDFC bank for this example. As explained above, the first four characters represent the bank. So it will be ‘HDFC’. The fifth letter is a ‘0’ which is normally reserved for future purposes. The remaining characters are the code of the branch of the bank. So it would be, ‘HDFC0codeofthebranch’.
IFSC plays a major role in transferring funds online using several payment options like NEFT, RTGS, and IMPS. With demonetisation and technological shift, more and more people are opting for online payments using various methods. For detailed information on how IFSC is used in these payment gateways, read further.
NEFT is National Electronic Fund Transfer. Amongst all the modes of payments, NEFT seems to be the most popular one. It follows a different pattern of transferring funds from one bank to another, i.e, your money is transferred to another bank account in different batches.
These batches have been set according to the weekdays and have been framed within a particular set of time.
Generally, banks do not have an upper limit on the amount which needs to be transferred. However, the State Bank of India has imposed a limit of Rs. 10 lakhs on transfers done via this mode.
To transfer money via NEFT, you need to make sure that your bank extends the facility of transferring funds online via NEFT. Additionally, if you don’t have a net-banking account, you need to create one by registering for it on the official website of your bank. For registration, your mobile number should be registered with the bank. Once your registration is complete, you will receive login credentials for your net-banking account. After you have the credentials, follow the steps mentioned below:
You might have to pay a minimal charge for transferring fund. The charge is mostly dependant on the amount that you have transferred. NEFT also comes with several limitations like funds can’t be transferred at the time of your preference and on bank holidays.
RTGS is the Real Time Gross Settlement. You need a net-banking account for this procedure also. It also operates according to the time slots. The process of transferring funds is similar to that of NEFT. Before transferring, it is advisable that you check if your account and the account of your beneficiary are compatible with the RTGS process.
RTGS services are not available on a Sunday.
The main features of RTGS (Real Time Gross Settlement) mode are
The transaction fee is dependant on the amount transferred via this mode.
IMPS is the Immediate Payment Service. National Payments Corporation of India launched this service in the year 2010. It is a 24*7 fund transfer service which is functional throughout the year.
With the help of IFSC code, you can also transfer funds via SMS. Follow the steps mentioned below to transfer funds via SMS:
Generally, the IFSC code is mentioned on the cheque books if your bank is extending NEFT facilities. You can also call any branch on their helpline number to know about the IFSC code. In case you want to verify or need the IFSC code, you can follow the steps mentioned below:
By following the steps mentioned above, you can find the IFSC code of any registered bank.
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