The Indian Financial System Code (IFSC), is a unique 11-digit alphanumeric code that is used for online fund transfer transactions done via NEFT, RTGS and IMPS. You can find the IFSC code on the cheque leaf that is provided by the bank. The Reserve Bank of India (RBI) assigns the IFSC codes to the bank. Apart from the cheque leaf, you can also find the IFSC code on the official website of the bank and the RBI. In case you are using net banking to transfer money, it is mandatory for the IFSC to be entered to initiate the transfer. Unless there is a merger, banks do not modify or change the IFSC code.
Indian Financial System Code helps the RBI monitor all banking transactions without any blunders. A simple IFSC code can aid the RBI track, oversee, and seamlessly maintain all financial transactions that are carried out via NEFT, RTGS and IMPS. For bank customers, IFSC code is important because most electronic fund transfers cannot be initiated unless the IFSC code of the beneficiary/payee is provided along with the bank account number. IFSC code plays an important role when money is transferred from one account to another through methods such as IMPS, NEFT and RTGS. All these options are fundamentally concerned with inter-bank money transfer but perform this task in different ways. The common thread amongst these varied options is the bank IFSC codes system.
NEFT : National Electronic Fund Transfer. As the name specifies, it concerns with the transfer of funds from one bank account onto another. This is a popular money transfer system in India. Herein, IFSC codes must be suitably provided to ensure that money is safely transferred from one bank account to another. Apart from the IFSC code, the beneficiary name, account number and account type are also needed to be provided. All NEFT transactions are settled in a batch-wise format.
RTGS means for Real Time Gross Settlement. As the name suggests, it is a popular option for the quick transfer of funds (also securities) from one bank to another, without subjecting the same to any waiting period. The operative words here are ‘Real Time’ (transactions happen instantaneously) and ‘Gross’ (refers to the fact that no extra charges will be levied). IFSC codes act in a similar way as in the case of NEFT- helping to correctly identify the participating bank branches. RTGS fund transfers are usually used for high-value transactions and are cleared immediately. The details required for RTGS fund are the name of the payee, the IFSC code, the account number, and the transaction amount.
IMPS stands for Immediate Payment Service, is the most popular. It is a relatively new option in India (founded in November 2010). Through this service, money can be transferred instantly and across all popular Indian banks via the service available on the subscriber’s mobile phone, ATM or through the internet. This system is reputed for being very safe, fast, economical and not restricted in terms of the maximum amount that can be transferred. One cannot initiate an IMPS fund transfer without providing an IFSC code.