The Indian Financial System Code (IFSC) is an identification code. It is unique for every bank branch containing 11 characters. It could be a combination of numbers and alphabets. This code is allotted by the Reserve Bank of India or RBI. As the code is unique to particular branch, the exact location of the same can be identified easily with it. The code can be found on the front page of a person’s bank account passbook, on RBI website, or the cheque leaf issued by the bank.
Any type of online fund transfer required a legit IFSC. Transfer via likes such as IMPS (Immediate Payment Service System), RTGS (Real Time Gross Settlement), and NEFT (National Electronic Funds Transfer), CFMS (Centralized Funds Management System) require IFSC. You can visit the RBI website for more information on specific IFSCs of bank branches.
What Happens on Entering an IFSC Code for a Fund Transfer?
An IFSC code serves as a route to send messages properly to a specific bank-branch, making it sure that the transfers are done to the right place. It identifies the origination and destination bank branches without hassles, thus used for appropriate functioning for RTGS and NEFT, extensively. In layman’s terms, fund transfer on the internet from a bank account to another, is only facilitated with help of IFSC details, without which the fund transfer will not be completed.
The sender needs to enter the IFSC information of the fund recipient to proceed. If wrong details are entered, then the fund transfer will not take place and the amount will not be transferred to the recipient, but remain with the sender itself.
Benefits of an IFSC Code
Below given are advantages of an IFSC.
- Used to identity a respective branch of a bank
- Restricts errors in the fund transfer process via internet
- Accurate money transfer assured through IFSC details for RTGS, IMPS, and NEFT
Interesting Facts about IFSC Codes
Below given is some interesting information about IFSC.
- Sublet Branches: Every major bank and their respective branched have an IFSC. For instance, one of the branches of the State Bank of India has IFSC as SBIN0003357. However, there are sublet branches, which are small banks, like the cooperative ones. These are not assigned any IFSC Codes because they can be identified easily by their bank names.
For example, YESB0NCCB01 may seem like the IFSC of a Yes Bank branch, but in fact it is the code for the Newada Central Co-operative Bank. Usually, small banks depend on major banks for processing the IFSC codes.
- IFSC Codes for Payment Banks: The RBI introduced a new banking model for Payment Banks. These are allowed to perform banking function of accepting deposits up to Rs. 1 lakh, and offer facilities such as mobile banking, net banking, and ATM and debit card facilities to customers.
The involved company however cannot issue credit cards or lend money. At present there are only a few players who have Payment Bank licenses. These payment banks have their own individual IFSC codes.