Gone are those days when customers had to visit banks in person, fill the required vouchers, and stand and wait for their turn in long queues at the desired counter. With the age-old computer systems and older employees manning the counters, the conventional banking procedure was unusually long, time consuming, and nerve-wracking. However, with the advent of technology in the world of banking, the waste of valuable business hours can now be avoided easily.
IFSC Codes:
Moving with the technology flow, Reserve Bank of India came up with the innovative online banking system for the convenience of its customers. As a part of the internet banking reforms, the RBI came up with a system of allotting unique digital signature, known as IFSC (Indian Financial System Code), to every bank and its branch in India. The IFSC code is an 11 digit signature, which consists of an alphanumeric combination of characters, which are unique for every bank branch and are used for the purpose of Electronic Fund Transfer.
The 11 digit IFSC code can be divided into several parts:
During the early days, banks normally published IFSC code on the cheque book leaves and bank pass book as per their own will. However, later on, the RBI made it compulsory for every bank to state this code on the books provided to the customers for facilitating easy fund transfers through NEFT and RTGS systems. The RBI has adopted the practice of changing these codes every now and then, apart from just regulating them, for security reasons.
MICR Code
MICR code is relatively new to the world of banking and refers to Magnetic Ink Character Recognition Code. It can be understood as the code printed in black ink at the bottom of the cheque leaves issued by the banks these days. MICR is the name of technology that is used in printing these codes on cheques. In addition to acting as a security bar code for protecting the transactions, the MICR code is also a crucial element of online money transfers. Every bank branch has its own MICR code and this helps the RBI in identifying the particular banks and speed up the banking process.
The MICR code comprises of nine figures, with each pair of three digits presenting a part of the important information pertaining to the transaction. Generally, the first three digits in the MICR code represent the city code, the next three represent the bank code and the last three stand for the branch code. The information presented in these codes is readable by machine only, on the basis of which, the clearing process is automated by the bank’s systems.
No matter how fast the world is changing, especially when it comes to banking, the technology behind IFSC code and MICR code is here to stay and make the process of making transactions all the more safe, quick, reliable and efficient.
Also Check The History of the Check and Standardization Efforts (PDF).
IFSC Codes:
Moving with the technology flow, Reserve Bank of India came up with the innovative online banking system for the convenience of its customers. As a part of the internet banking reforms, the RBI came up with a system of allotting unique digital signature, known as IFSC (Indian Financial System Code), to every bank and its branch in India. The IFSC code is an 11 digit signature, which consists of an alphanumeric combination of characters, which are unique for every bank branch and are used for the purpose of Electronic Fund Transfer.
The 11 digit IFSC code can be divided into several parts:
- The first 4 figures are used for identifying bank branch and are normally in alphabets.
- The last six figures in the signature are in alphanumeric or numeric order, and are used to define the bank’s exclusive code.
- The fifth digit in this unique code is the future use number of the bank, which is, Zero (0).
During the early days, banks normally published IFSC code on the cheque book leaves and bank pass book as per their own will. However, later on, the RBI made it compulsory for every bank to state this code on the books provided to the customers for facilitating easy fund transfers through NEFT and RTGS systems. The RBI has adopted the practice of changing these codes every now and then, apart from just regulating them, for security reasons.
MICR Code
MICR code is relatively new to the world of banking and refers to Magnetic Ink Character Recognition Code. It can be understood as the code printed in black ink at the bottom of the cheque leaves issued by the banks these days. MICR is the name of technology that is used in printing these codes on cheques. In addition to acting as a security bar code for protecting the transactions, the MICR code is also a crucial element of online money transfers. Every bank branch has its own MICR code and this helps the RBI in identifying the particular banks and speed up the banking process.
The MICR code comprises of nine figures, with each pair of three digits presenting a part of the important information pertaining to the transaction. Generally, the first three digits in the MICR code represent the city code, the next three represent the bank code and the last three stand for the branch code. The information presented in these codes is readable by machine only, on the basis of which, the clearing process is automated by the bank’s systems.
No matter how fast the world is changing, especially when it comes to banking, the technology behind IFSC code and MICR code is here to stay and make the process of making transactions all the more safe, quick, reliable and efficient.
Also Check The History of the Check and Standardization Efforts (PDF).