The Importance of IFSC Code for Funds Transfer Within India

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In the Indian Banking system, IFSC is known as Indian Financial System Code. Itis 11 digits serial number, consisting of unique alpha-numeric character combination. The numbers can be divided as – the first 4 digits are in alphabet order, signifying the bank, the fifth number is single digit 0 (Zero), to be used by the bank in the future, and the last 6 numbers are either a combination of alphanumeric digits, or only numeric numbers, identifying the branch of the bank. The unique serial numbers are assigned by the RBI to all bank branches using the Electronic Fund Transfer systems.

Reserve Bank of India (RBI)

The RBI being the centralized banking authority also controls the funds transfer between the Indian banks under RTGS and NEFT systems. The official website of RBI displays the list of all banks in Indian states and union territories that participate in this system. The banks offering net banking facilities and participating in the EFT (Electronic Fund Transfer) system must provide the bank identification characters to their customers.

Ways to find IFSC Code

Online and net banking customers must be fully knowledgeable about the beneficiary bank’s IFSC Code for sending or receiving payments within the country, using RTGS (Real Time Gross Settlement) and NEFT (National Electronic Fund Transfer) systems. Individuals, corporate and firms, with or without an account in the bank can also transfer money, but such a bank must be a participant in the RBI regulated EFT system. The official website of the Reserve Bank of India provides the complete list of EFT participating banks.

There are different ways to find the IFSC Code of your bank. Most of the banks print these unique characters on the Check book leaves, but if they are not the ones printed on a Check leaf, you can call the customer care of the specified bank and get the IFSC Code. The third method that can provide you with these unique numbers is to visit the financial internet sites because there are websites that provide information on bank details, Bank’s NEFT status, branch address, branch location and IFSC Code.

It is also necessary to remember that the unique identification characters of the banks are changed from time to time by the RBI, and one must contact the bank branch for the confirmation of the identification numbers obtained from the third-party sources. The wrong code may disallow your payments transfer.

NEFT and RTGS Systems

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

OIL– There is no minimum or maximum limit to funds transfer under this system and money reaches the beneficiary bank within 24 hours to 48 hours.

RTGS– This system is the fastest mode of payment transfers and payments can reach in no time. The transactions are operated in “real time” and “gross” basis, and not bunched with other transactions. The minimum amount for funds 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 whichever payment systems you are using, IFSC Code is vital for your funds transfer and these unique numbers are valid for only intra-bank funds transfers within India and not valid for international fund transfers. You will have to use SWIFT or BIC code for overseas funds transfer.



Source by Subodh Maheshwari

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