The Importance of IFSC Code for Funds Transfer Within India

26.07.2020

IFSC Code for Funds Transfer Within India

In the Indian banking system, IFSC is known as the Indian Financial System Code. Itis 11 digit serial number with a unique alpha-numeric character combination. The numbers can be divided as follows - the first 4 digits are in alphabetical order, denotes the bank, the fifth digit is the single digit 0 (zero), which will be used by the bank in the future, and the last 6 numbers are a combination. Identifying the bank branch of alphanumeric digits, or numeric numbers only. The unique serial number is assigned by RBI to all bank branches using an electronic fund transfer system.

Reserve Bank of India (RBI)

Being the centralized banking authority of RBI, it regulates the transfer of funds between Indian banks under RTGS and NEFT systems. The official RBI website displays a list of all banks in the Indian states and union territories that participate in this system. Banks facilitating net banking and participating banks in EFT (Electronic Fund Transfer) system provide bank identification cards to their customers.

Ways to find IFSC code

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

There are various ways to find your bank's IFSC code. Most banks print these unique characters on the checkbook leaves, but if they are not printed on the check leaf, you can call the customer care of the specified bank and get the IFSC code. The third method that can provide you these unique numbers is to go to financial internet sites because there are websites that provide bank details, bank's NEFT status, branch address, branch location, and IFSC code.

It is also necessary to remember that banks' unique identity cards are changed from time to time by RBI, and the bank branch should be contacted to confirm the identification numbers received from third party sources. Incorrect code may cause your payment transfer to be declined.

NEFT and RTGS systems

Both the 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:

NEFT

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

RTGS

This system is the fastest method of payment transfer and payment can reach in no time. Transactions operate on a "real-time" and "gross" basis and are not associated with other transactions. The minimum amount for fund transfer is Rs. 1, 00,000, or more and the payment is deposited in the beneficiary's account within 2 hours.

You must remember that whatever payment system you are using, the IFSC code is important for your fund transfer and these unique numbers are only valid for intra-bank fund transfers in India and are not valid for international fund transfers. For foreign fund transfer, you have to use SWIFT or BIC code.