Understanding an IFSC Code
IFSC stands for Indian Financial System Code and is a unique eleven-digit number, which is used for transferring funds online for NEFT, IMPS and RTGS transactions. It is a combination of numbers and alphabets which is displayed on the cheque-book provided by the bank.
The IFSC code can also be found on the front page of passbook of the accountholder. Each bank branch has its own IFSC code, which is assigned by the Reserve Bank of India (RBI). The code can easily be checked by the accountholders on the website of the RBI.
A valid Indian Financial System Code is mandatory for Internet banking transactions for transferring funds, using NEFT, IMPS and RTGS. Generally, there isn't any change or update in the 11-digit IFSC code. Recently, the State Bank of India changed Indian Financial System Code of its branches all over the nation after the merger with five associate banks and 1 other bank.
Is RTGS code different from IFSC code?
Since the IFSC code is used to transfer money using RTGS, it is often referred to as RTGS code or NEFT code.
Are IFSC code and branch code same?
The IFSC code and the branch code are two different codes. The branch code is a part of the IFSC code, while the IFSC code is used the identify the bank and its branch.
How is RTGS relevant in banking?
RTGS stands for Real Time Gross Settlement and is considered one of the main payment and settlement systems in India. Details of the accountholder like name, account number and the IFSC code of the bank are required to make payments through the process of RTGS.
RTGS is a safe process of transferring money from one bank account to another. IFSC code is often referred to as RTGS code or NEFT code for the same reason.
Can RTGS and IFSC code be considered the same?
An IFSC code is relevant in identifying the bank and its branch, while the RTGS is one of the two main payment and settlement systems in India. IFSC code is a mandate to conduct any EFT.
How is the branch code of a bank identified?
The branch code of a bank is helpful in distinguishing one branch from another. The last 6 characters of any given IFSC code is the branch code and is printed on cheque books and pass books. It is also available on the website of the bank.
How are the processes of NEFT and RTGS different?
RTGS stands for Real Time Gross Settlement, while NEFT refers to National Electronic Funds Transfer and are the two main systems for money transferring in India. Minimal transfer charges are to be paid for conducting transfers using NEFT or RTGS. The key differences between them are explained below.
Working of an IFSC code
The IFSC code is facilitated by an alpha-numeric code and is used for transfer of electronic funds in India. This particular code is useful for recognising different branches of banks, which participates in the two main settlement and payment systems in India, namely, National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS).
IFSC code is assigned by the RBI and its first four letters represent the bank. The next character zero, is reserved for any future use. The last six characters of the IFSC code are the code for identification of the branch.
How is an IFSC code useful?
The Indian financial systems make use of the IFSC code to facilitate electronic and online transfer of money.
The pattern of the IFSC code
The first four characters of an IFSC code are alphabets which denote the name of the bank. This implies that the IFSC code of each different branches of the same bank will begin with the same four letters, while the fifth character is a zero.
The part which makes the IFSC code unique are the remaining six characters, which are in the form of digits or numbers and denote the branch code.
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