- DetailsWritten by PolicyBazaar -
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Modified 23 May 2018
Do you remember the first time you transferred funds with a net banking account? You were prompted to fill in a few necessary details such as name of the account holder, account number, branch and IFSC code.
What’s an IFSC Code?
IFSC code stands for Indian Financial System Code. It is an 11 digit identification code dedicated to a particular bank branch. This code is a combination of alphabets and numbers and is provided to bank branches by RBI. The first 4 alphabetic characters represent the bank, the 5th character is 0, and the last 6 characters, generally, are numeric but may be alphabetic as well.
All the payment processes such as NEFT, CFMS, and RTGS require IFSC to process the fund transfers.
Where can you find IFSC?
You can find the IFSC code of your branch on the first page of your passbook as well as the checkbook. You can find the IFSC code list of all bank branches on the official website of the Reserve Bank of India.
Significance of IFS Code
While making a transaction, everybody wants to make sure that his/her funds reach the intended bank without any hassle. If funds are transferred to a wrong bank, it triggers a variety of problems and unnecessary inconvenience since the transaction can’t be reversed automatically.
If such a situation arises, you will need to get in touch with your bank and discuss what exactly happened and wait for a particular time period before getting your money back. Eventually, you will get it back, but only after wasting your time.
One can transfer funds to a wrong bank/branch without even realizing so. We know that typo is a human error, but a mere typo can cause you a huge inconvenience. Whether you mistakenly furnish wrong account details or your bank is to be blamed, a wrong transaction can happen easily and with anybody.
IFSC helps in carrying out fund transfer transactions electronically by sending or routing messages to the specific branches of any particular bank. Along with that, IFSC is used by fund transferring systems to acknowledge both the branches involved in a transfer process.
Clearly, smooth functioning of NEFT as well RTGS is dependent on IFSC to a certain extent.
Why is IFSC Code required?
Earlier, transferring a fund was done traditionally. You would have had to visit the bank branch, fill up a form, and deposit the amount in the payee’s the account. With the advent of the internet and its wide penetration, money can be transferred online in a few simple steps.
In order to complete an online transaction, IFS code is required so that the money is deposited to the intended account.
Benefits of IFSC
Mentioned below are a few benefits of IFS code. Have a look.
- It Make Financial Transactions Smoother - You wouldn't need to take time out of your hectic schedule to visit your bank or stand in long queues to get the money transferred. With the help of IFSC, transactions can be processed worldwide and in a few steps.
- It Speeds up the Funds Transferring Process - Now, money transfer is a matter of few minutes. Thanks to online banking you can do banking from the comfort of your home. It is very helpful, especially when you have to transfer money on an urgent basis.
- It Curbs Potential Frauds - With each bank and its respective branches allotted a unique IFS code, an extra layer of security is added to your transactions. Thanks to this code, every transaction gets a starting and an ending point. Hence, it simplifies fund tracking.
- Fund Transfer Made Easier - You can access your net banking account easily any time, anywhere.
- Online Banking made Possible - Paying bills, paying for an order, or be it recharging your phone, transferring funds online is possible because of IFSC code. Now, you can embrace technology and get the best out of it.
The Fund Transfer Controlling Authority
The Reserve Bank of India is the central banking institution that controls all the fund transfers across the nation. It develops and provides the payment structure so that the security of any transaction isn’t compromised.
In A Nutshell
Thanks to IFS code, net banking transactions are carried out smoothly. If you want to find the IFSC of a particular bank then you can search for it using your search engine in this format: <the bank name> <space> IFSC; you will find the code in the result. For example, to search for HDFC IFSC, type HDFC bank IFSC code in the search box.
Some banks provide you IFSC codes listed in columns; all you have to do is select the IFSC code of the payee’s branch.
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