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Technology has become an integral part of our life and we can see that there is hardly any sphere of life, where we don’t use technology. The banking sector is no escape to this rule, as the banking transaction, which used to happen in the traditional ways, are also done with the help of technology. As you must be aware of the IFSC code which is used for the purpose of knowing the details of a particular bank name and branch, there are some other terms which are also necessary to do the banking transactions.
Have you ever noticed that there is a magnetic ink bar code which is printed at the bottom of all the bank cheques? This code is known as ‘Magnetic Ink Character Recognition’ which is generally known as MICR code. The name for this code is Given to the technology, which is used in printing the code.
The reserve bank of India, introduced this code in the year of 1980, along with the new modes to make the banking transactions effective and safe all across the country. And one of such compulsory code is MICR which is based cheque clearing system. The Indian Bank MICR code is not only used as a security code to protect your transactions, but it is also an essential for making transactions online.
The MICR code is unique to all the banks and their branches, it is the most important part for the purpose of online money transfers. As the MICR code is unique to all the bank branches, it also helps the Reserve Bank of India to identify the branch of the bank and speeding up the clearing process as well.
Understanding the MICR code:
- The MICR code contains nine digits and three digits have the significant some necessary information about the bank and the transaction. The initial three digits of an MICR code represent the code of the city in which the bank branch is located.
- In most of the cases, it is similar with the PIN codes of the postal addresses of India.
- Three digits after the above, stand for the code of the bank and the last three digits tell about the branch code of a bank.
Let us look at the example of the Indian Bank MICR Code:
If you have an account with Indian Bank in Chittranjan Park, Delhi then the nine digit MICR code for this bank will be 110019064, let us understand this code:
- The first three digits represent the code for the city, as the Delhi code is 110.
- The next three digits 019 represent the bank code for Indian bank.
- And the last three digits 064, these digits represent the bank branch code.