While going through your cheque book or passbook, you must have encountered an IFSC code which is also required while transferring money via e-transfer. This IFSC code is a special number assigned to all banks and branches in the country by the RBI.
IFSC Code: What is it?
The full form of IFSC is the Indian Financial System Code. It is a unique alphanumeric 11-digit number necessary for e-transfers such as RTGS, NEFT and IMPS. An IFSC code is printed on an account holder’s chequebook or the first page of the passbook and can also be viewed on the Reserve Bank of India’s website. The RBI assigns this code to every bank branch in India. The majority of internet banking transactions are invalid without an IFSC code.
Usually, the RBI does not modify or replace the IFSC code for any bank. But, following its merger with five affiliate banks and one other bank, the State Bank of India (SBI) amended the SBI IFSC code for all branches in 2018.
Why is the IFSC Code Important?
The Indian Financial System Code has three primary advantages:
- Identification: This code aids in the identification of the bank and its branches. It also provides each bank and branch with a unique identification number. This identification number is used to aid in the validity and reconciliation of all banks throughout the country.
- Error Elimination: This unique number aids in the elimination of any errors in the e-transfer of funds. Banking online has become secure for all transactions since IFSC codes make any security breach nearly impossible.
- E-transfer: An IFSC code facilitates electronic payment methods such as IMPS, NEFT and RTGS. It also saves time by transferring money to the respective accounts within 24 to 48 hours.
IFSC Code: Making Sense of the Sequence
The Indian Financial System Code consists of 11 alphanumeric digits. The first four characters in the code are usually alphabets representing the bank. Normally, the fifth letter of the sequence is zero (0). The following six characters are typically a combination of alphabets and numbers representing the bank branches.
What is the IFSC Code Used for?
As mentioned before, the Indian Financial System uses this code to carry out online and electronic money transfers. During e-transfers, IFSC also serves three main purposes.
- Since the IFSC number differs for each branch, safety is assured. As a result, there is no risk of fraud or theft when transferring funds.
- When you make an NEFT, IMPS, or RTGS transaction, your bank sends you an alert to your mobile phone and email address.
- The RBI can monitor and record all electronic transactions in the banking and financial sectors by utilising the IFSC.
IFSC Code: Where to find it?
The IFSC code can be easily spotted on:
- A passbook provided by any bank, as well as the cheque leaf issued by the respective bank.
- The codes for all banks can be found on the Reserve Bank of India’s website.
- The codes may also be accessed on the respective bank’s official website.
How to Transfer Money using IFSC Code?
When initiating an electronic fund transfer (IMPS, NEFT, or RTGS), the payer must enter the payee’s bank account details like the name of the bank and its branch, the account number, and the IFSC code. If the payer provides all of the necessary information, the cash is transferred quickly.
The Indian Financial System Code makes money transfers simple, secure, fast, and hassle-free. These RBI-assigned codes are unique to each bank and its branches. Thus every time money needs to be transferred; you need to have the IFSC code of the respective bank.
Conclusion
An SBI IFSC Code serves numerous important functions for the Reserve Bank of India, Bank branches as well as bank account holders. It makes transactions easy and safe while serving as a validation for all banks in India.
