The Indian banking system uses several codes to facilitate the fast and accurate processing of financial transactions. Two such codes are MICR (Magnetic Ink Character Recognition) code and IFSC (Indian Financial System Code). While both codes serve a similar purpose, there are some key differences between them. In this article, we’ll explore the differences between MICR and IFSC code and how they are used in the Indian banking system.
MICR code format is a 9-digit code that is used for processing cheques. The code is printed at the bottom of the cheque leaf and helps in identifying the bank and the branch where the cheque was issued. The first three digits of the MICR code represent the city code, the next three digits represent the bank code, and the last three digits represent the branch code. MICR code is read by magnetic ink character recognition devices, which can quickly process large volumes of cheques.
IFSC code, on the other hand, is an 11-digit alphanumeric code that is used for electronic fund transfers. The code is used to uniquely identify a bank branch participating in the National Electronic Fund Transfer (NEFT) network, Real Time Gross Settlement (RTGS) system, and Immediate Payment Service (IMPS). The first four characters of the IFSC code represent the bank code, followed by a zero (0) and the last six characters representing the branch code. The code is used to transfer funds from one bank account to another in a secure and efficient manner.
One of the main differences between IFSC and MICR codes is their usage. While MICR code is used for processing cheques, IFSC code is used for electronic fund transfers. Another difference is the number of digits in each code. MICR code is a 9-digit code, while IFSC code is an 11-digit code. Additionally, MICR code is read by magnetic ink character recognition devices, while IFSC code is entered manually or through online banking systems.
What is difference between IFSC and MICR code
Both IFSC and MICR codes play a crucial role in the Indian banking system. They help in the quick and efficient processing of financial transactions, reducing the chances of errors and delays. It is important to ensure that the correct codes are used while making transactions to avoid any issues.