What are the Advantages of IFSC Code?

IFSC (Indian Financial System Code) is used for identification of bank branches in India. The code will be used to transfer funds through NEFT or RTGS without any issues. The code will be issued by RBI (Reserve Bank of India). The funds can be transferred to the beneficiary account by mentioning the account number, bank name and IFSC code. The code will help in performing paperless transactions quickly and efficiently. It will be used by users while performing banking operations by using internet banking or mobile banking facility.

What is IFSC code?

IFSC stands for Indian Financial System Code. The code comprises of 11 characters. The first 4 characters indicate the name of the bank. For example, the first four letters of the code, SBIN0000XXX indicates the State Bank of India. The fifth character is ‘zero’ and it is reserved for future use. The last six characters indicate the unique branch code. By using IFSC, the location of the bank branch in a city, district or state can be done very easily. The online fund transfer option NEFT (National Electronic Fund Transfer) and RTGS (Real Time Gross Settlement) can be accomplished without errors by using the IFSC.

Benefits of IFSC

As you perform IFSC Search online, you can find out the bank name, address, phone number and other useful information. You will enjoy the following benefits by using IFSC code:

  • Internet banking operations
  • Error-free transactions
  • Instant money transfer
  • Communication
  • Transfer of money through NEFT and RTGS
  • Paperless money transaction
  • Paperless money transaction
  • Quick validation and reconciliation

Internet Banking Operations

You can perform internet banking operations in a seamless manner by mentioning the IFSC code in NEFT and RTGS transactions. The online banking is simple, quick and effortless. You can save time and resources by making online payments. The money can be transferred from one bank account to another bank account in a safe and secure manner by using online features. If you transfer the money to an account within the same branch, it will take place instantly. The money will be deducted from the sender’s account and will be credited into the beneficiary’s account.

In case of NEFT and RTGS, the transfer of funds will take place in batches or in real-time as per the case. The transfer will take place as per the RBI guidelines on bank working hours. You should be aware of the NEFT or RTGS cut-off timings. If the amount is not credited on the same day, it will be credited on the next working day.

The net banking user should provide the beneficiary’s IFSC Code SBI to transfer funds.

Error-Free Transactions

By using IFSC codes, transactions across banks can be done without any errors. Each bank and branch will possess a unique IFSC code. Hence, there will not be any chance of theft or false withdrawals. The security breach is almost impossible. The IFSC codes are mentioned on the cheque leaves as well so that the transactions will take place in a secured manner.

Instant Money Transfer

To send money to a beneficiary, you will not want to visit a bank branch or you will not want to wait in long queues. The online transaction can be performed by mentioning the IFSC code. The operation can be performed at any time and from any part of the world. If you have access to gadget (mobile phone or laptop) with internet connection facility, the money can be transferred by logging into your bank account. The transactions will take place instantly or within few minutes as per the type of online transaction.

Communication

As soon as the transfer of funds is initiated or completed, a message will be sent to the sender as well as the beneficiary. If the user registers his/her email address, the message will be sent to the email ID also in addition to the message sent to the mobile number.

Transfer of Money through NEFT

There is no lower or upper limit for NEFT transactions. The money will be transferred into the beneficiary’s account in a short period of time. You should initiate the transaction before the cut-off time of the day so that the transfer will take place on the same day. You will want to add the beneficiary account before sending the money. While adding the beneficiary’s details, you should provide the bank name, account number and IFSC code of the beneficiary’s bank branch.

Transfer of Money through RTGS

If you transfer money greater than Rs. 2 lakh, it can be accomplished very easily by using the RTGS. It is the fastest mode of online money transfer option. As the acronym for RTGS says, the settlement of transaction will take place instantly. The inter-bank money transfer will be done quickly and efficiently by RTGS channel. The transaction can be done by approaching the bank in which case, the relevant form should be filled at the bank and it should be submitted to the bank’s staff. The IFSC code of the receiving bank will be mentioned in the form. You can send money to a registered beneficiary as per the terms and conditions of the online banking facility.

Transfer of Money through IMPS

IMPS (Intermediate Payment System) will enable the transfer of money from one account to another account in a seamless manner. You can transfer a small amount to a beneficiary by mentioning the account number and IFSC code in your mobile app or internet.

Paperless Money Transaction

As you perform IFSC Search and provide the correct code, the money will be transferred to the beneficiary quickly and safely. The online transaction will eliminate the usage of paper. Thus, you will save the environment by choosing online money transfer option.

Quick Validation and Reconciliation

The transactions based on IFSC Code SBI will be validated very quickly. There will not be any conflict as the transaction will be quick and transparent. The transaction will take place by deducting the money from the sender’s bank branch and crediting the money into the beneficiary’s bank branch. Hence, the IFSC code of the sending bank branch as well as the IFSC code of the receiving bank branch will be used while recording the transaction. There will not be scope for discrepancy and accounts can be settled quickly in a seamless manner.

How to Find IFSC Codes?

IFSC code of your bank branch can be found by using the following methods:

  • On cheque Leaves - You can find the IFSC code of your bank branch on the cheque leaves provided by the bank
  • Visit Your Bank - The IFSC code can be found by visiting the bank branch
  • Make a Phone Call - You can call your bank and find out the IFSC code
  • RBI Website - You can visit the RBI official website and perform IFSC Search to find out the IFSC code of your bank branch. You should provide bank name, city, branch name and state to find out the code.
  • Third-Party Websites - There are many third-party websites which provide authentic information about bank address and IFSC codes. However, you should exercise due diligence in finding information from reputed websites.

Advantages of IFSC Codes

IFSC codes are introduced by RBI to deliver best banking experience for customers. Bank staff will also be able to perform various kinds of financial transactions quickly and efficiently by using IFSC codes.

  • Identification of Bank and Branch - Each and every bank and branch is identified with the help of the IFSC code. The identification is used to accomplish online fund transfer.
  • Accomplishes Modernization of Bank Operations - The bank operations can meet the emerging needs of individuals and corporate clients by implementing the IFSC based online transactions.
  • Saves the Environment - By using IFSC code-based online transactions, you can perform paperless transactions. You will resort to environment-friendly measures by avoiding the paper.
  • Quick Transfer of Money - The money can be transferred quickly by using online channels and you will want to provide the IFSC code of the beneficiary in the online form.
  • Facilitates NEFT and RTGS - The money will be transferred across bank branches through NEFT or RTGS as per your requirements and IFSC code should be mentioned in this process.

RTGS Money Transfer

The online payment system RTGS was launched on 26th March 2004 by Reserve Bank of India. Only 4 banks were covered by RTGS at the time of launch of the service. Now, the service is available by more than 109 banks spread across 13,000 branches in India.

There are certain benefits of RTGS. The transactions will be settled in real-time. You will eliminate the credit risk and there will not be liquidity crunch. As soon as the payment request is accepted by the central bank system, it will be credited into the beneficiary’s account.

There will be quick business growth when financial transactions take place quickly and in a secured manner.

There are no charges for inward RTGS transfers. For outward remittances, the remitter should pay charges. The charges will be Rs. 25 for transactions between Rs. 2 lakh and Rs. 5 lakh. For transaction above Rs. 5 lakh, the charges will be Rs. 50.

With RTGS, the transaction will take place on a one-to-one basis without bouncing other transactions. It is ideal to perform high-value transactions.

RTGS transaction timings:

  • Monday to Friday - 9 AM to 4.30 PM
  • Saturday - 9 AM to 2 PM

NEFT Fund Transfer

It is an online nation-wide fund transfer system. The system is supported by RBI. Individuals and corporate clients can use the NEFT fund transfer facility to transfer money from one account to another account of a different bank and branch.

NEFT is ideal to transfer small and medium amount. There is no minimum limit and you can transfer one rupee as well.

NEFT mode of fund transfer will take place in batches. There are 11 settlements from 9 AM to 7 PM on weekdays and 5 settlements on Saturdays from 9 AM to 1 PM.

When a customer places NEFT transaction request, the bank will send the payment request to RBI within 3 hours. The time taken to complete the transaction is based on the beneficiary bank’s process time.

The NEFT process involved five levels and IFSC code will be used to make transactions.

Level 1

Authorization of transfer – The customer should authorize the NEFT transfer.

  • It can be done at the bank branch by filling the form.
  • The authorization can be done by net banking or mobile banking system
  • Some banks provide NEFT payment by ATM network as well

Level 2

The payment transfer request will be prepared by the remitting branch and it will be sent to NEFT service center

Level 3

NEFT service center will send message to NEFT clearing center about the next batch of payment transfers. NEFT clearing center is managed by RBI.

Level 4

The fund transfer requests will be sorted as per the beneficiary bank branches. The debit entry will be made in the remitting bank and credit entry will be made in the beneficiary bank. Response message will be sent to NEFT service center as well.

Level 5

The destination bank receives the acceptance message from the NEFT clearing center and funds will be transferred to the beneficiary bank account.

NEFT Service Charges

No charges will be levied on the beneficiary’s account for inward remittance

For outward remittance

  • 5 plus service tax - If the amount is less than Rs. 1 lakh
  • 15 plus service tax - If the amount is in between Rs. 1 lakh and Rs. 2 lakh
  • 25 plus service tax - If the amount is above Rs. 2 lakhs

Conclusion

IFSC code is used in performing various kinds of financial transactions by customers as well as bankers. The code simplifies the online transactions and it is helpful for individual customers and corporate clients also. You can perform IFSC Search to find out the correct code and perform various kinds of online transactions.