All bank branches in India are identified by a unique code know as Indian Financial System Code (IFSC). This IFSC code is used to identify bank branches across India for electronic transfer of funds.
IFSC code is an 11 character alphanumeric code (contains both numbers and alphabets). The first four letters of the code which are alphabets represent the bank, the last six letter that are mostly numeric (but can be alphabets too) represent the particular branch and the fifth letter is always a 0 that has been reserved for future use.
The IFSC code is a valuable to enable financial transactions electronically, as IFSC code is used by the banks to make sure that the funds are transferred to the right customer. All payment transfer methods such as IMPS, RTGS and NEFT use the IFSC code in the same way. IFSC helps the banks at the back end settle the transactions at a much faster pace automatically.
The information of the IFSC code for all the bank branches is provided by Reserve bank of India (RBI) on their website. You just have to choose the bank name and enter the branch name and you will get the details of that particular branch by clicking on the name of the branch. The details you will get are the bank name, address, MICR details and IFSC Details
IFSC stands for Indian Financial System Code.
MICR is a technology used for verifying the authenticity of the paper documents such as cheques issued by the banks. The full form of MICR is Magnetic Ink Character recognition. The MICR codes help make the transactions by documents like cheques secure by providing a medium to validate the documents used for these transactions.
RTGS is an electronic method of settling financial transactions. The full form of RTGS is Real Time Gross Settlement. You need to provide the IFSC code to make RTGS transactions. RTGS transactions enable the transfer of money in real time during banking hours and are undertaken for transfers above rupees 2 lacs.
NEFT is the first and most used electronic money transfer system in India. The full form of NEFT is National Electronic Fund transfer. The money transferred through this system is not made available real time and is settled by the banks during the working day. However if you initiate the NEFT after a cutoff time in the day the transaction will be processed the next day during banking hours. There is no minimum limit for transfer in NEFT unlike the RTGS where the minimum transfer has to be 2 lacs.
IMPS is the newest of the three money transfer options in India, others are NEFT and RTGS. The full form of IMPS is Immediate Payment Service. True to its name using IMPS you can immediately transfer the money to the receivers account.
IMPS can be used to transfer money 24 hours a day and seven days a week and therefore can be used to transfer money even after the close of regular banking hours and on Sundays/ Holidays.
Unlike the RTGS there is no minimum amount cutoff to use the IMPS service.