The Importance of IFSC Code for Funds Transfer Within…

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In the Indian banking system, IFSC is known as Indian Financial System Code. It is an 11 digit serial number, consisting of unique alpha-numeric character combination. The numbers can be broken down as follows – the first 4 digits are in alphabetical order, indicating the bank, the fifth number is the single digit 0 (zero), which will be used by the bank in the future, and the last 6 digits are either a Combinations of alphanumeric digits or simply numeric numbers that identify a bank branch. All bank branches using the Electronic Funds Transfer System are assigned unique serial numbers by the RBI.

Reserve Bank of India (RBI)

RBI being the centralized banking authority also regulates money transfer between Indian banks under RTGS and NEFT systems. The official website of RBI displays the list of all the banks of Indian states and union territories that participate in this system. Banks providing Net Banking facilities and participating in the EFT (Electronic Funds Transfer) system must provide Bank Identification Characters to their customers.

Ways to find IFSC code

Online and net banking customers need to have complete knowledge of the beneficiary bank’s IFSC code in order to send or receive payments within the country using RTGS (Real Time Gross Settlement) and NEFT (National Electronic Funds Transfer) systems. Individuals, corporates and firms can also transfer funds with or without an account with a bank, but such bank should be a participant in the RBI regulated EFT system. The official website of Reserve Bank of India provides the complete list of banks participating in EFT.

There are various ways to find IFSC code of your bank. Most of the banks print these unique characters on the leaves of the check book, but if they are not printed on the leaf of the cheque, you can call the customer care of the specified bank and get the IFSC code. The third way which can provide you these unique numbers is to visit financial internet sites as there are websites which provide bank details, NEFT status of the bank, branch address, branch location and IFSC code information.

It is also necessary to remember that the unique identification characters of banks are changed from time to time by the RBI, and one should contact the bank branch to verify the identification number obtained from third party sources. Incorrect code may disallow your payment transfer.

NEFT & RTGS System

Both NEFT and RTGS systems for payment transfer, and for receiving funds are supported by the Reserve Bank of India. The basic differences between these two systems include:

NEFTThere is no minimum or maximum limit for fund transfer under this system and the money reaches the beneficiary’s bank within 24 hours to 48 hours.

RTGS– This system is the fastest mode of payment transfer and the payment can reach within no time. Transactions are conducted on a “real time” and “gross” basis, and are not bunched with other transactions. The minimum amount for money transfer is Rs. 1, 00,000 or more and the payment is credited to the beneficiary’s account within 2 hours.

You must remember that whatever payment system you are using, IFSC code is important for your fund transfer and these unique numbers are valid only for intra-bank fund transfer within India and not for international fund transfer Are. You will need to use SWIFT or BIC codes for overseas fund transfers.

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