IFSC is the acronym for the Indian Financial System Code given by the RBI for the identification of all banks and its branches which come under the Electronic Fund Settlement System in India. The RBI is the apex banking body of India and lays down all the banking guidelines across the country and controls all associate banks. Bank IFSC Code is used to route the messages to the destination Banks/branches from the originating Bank/ branches and thereby facilitate interbank electronic funds transfer.
The two types of Electronic Fund Settlement System are;
- RTGS – Real Time Gross Settlement. RTGS enables electronic transfers to make payments, receive and transfer funds between accounts and banks/ branches in real time.
- NEFT-National Electronics Funds Transfer. NEFT is a type of E- cheque used by an organization or individual person to electronically transfer funds from one account into another and a specific time is required for transaction to be made and the recipient to be verified.
- NEFT is an eco-friendly payment mode used by individuals or an organization to transfer funds electronically from one account to another. It takes the form of an e-cheque as it takes a specific period time for the amount to be cleared and the beneficiary to be verified.
What does an IFSC code look like?
The IFCS code given by the RBI follows a simple format in the form of an 11 digit alpha-numeric code. Each IFSD code for every Bank branch across the country is unique.
What does the Code signify?
The Bank name is denoted by the first four characters and is in alphabet letters.
The last six may be either in alphabets or numeric and denotes the particular branch of that bank. The fifth character in the whole IFSC code is zero and is reserved to denote the future transaction.
For example the IFSC code of a branch of Citibank could be CITI0000029.
CITI denotes Citibank, the fifth character is zero, and the last 6 characters which are 000029 denote the particular branch of Citibank.
These last 7 digits are unique to every branch of a particular Bank. As in the case above, the last 7 digits identify a particular branch i.e. 000029. Another branch of Citibank in the same city would have a different code e.g. 000027
Where to Find the IFSC Code?
- In case you want to find out the IFSC of any Bank branch you can find the list from the RBI website.
- Also each and every bank across the country has a bank wise IFSC list available with it.
- The cheque/cheque book which is issued by any Bank will have this code printed on it.
- You can go to the website www.indianbankdetails.com to find the IFS code.
Why is the Importance of the IFSC code?
Today banking is virtual and physical cash is not transferred usually between banks and branches for any transaction. NEFT and RTGS require the concerned Bank/branches to use the IFSC for making and validating transactions.
Banks and organizations use the IFSC to conduct National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS) transactions to identify and help in streamlining the transactions between different accounts, bank branches and banks.
IFSC system is a very important and useful code which makes interbank electronic funds transfer smooth, streamlined, hassle free and quick.