Wondering what IFSC codes are used for? What is IFSC, and why are they important?
For how long have you been making transactions through cards or cheques? Have you ever thought of why you actually need an IFSC code? Why is such a code mentioned in your cheques, bank passbooks, and online transactions?
Let's understand the reasons.
What is IFSC?
IFSC is an abbreviation for Indian Financial System Code. It is an 11-digit identifying number. This number is specific to one bank branch only.
The IFSC code comprises digits and letters. The Reserve Bank of India gives such a code to bank branches.
The first four alphabetic characters of the code represent the bank. Next comes the number 0, and then the next six characters are numerical, however, they can also be alphabetic.
The IFSC code is needed to process the fund transfers for all payment modes. These may include CFMS, NEFT, and RTGS.
The presence of the code makes sure that the funds reach the right destination bank, sans any mishap during the transaction process.
Now, the transactions cannot be reversed automatically, thus, transferring money to the wrong bank leads to several issues and unavoidable inconvenience.
The IFSC code has reduced the fuss of going through lengthy processes of transactions. Gone is the time when money was sent through the local bank branch, and then one had to undergo the lengthy process of filling out the form, and then depositing the amount into the payee's bank account.
The development of the internet and its worldwide use has made it possible to send money through online mediums with the utmost ease and speed.
IFSC codes are essential to complete online transactions and make sure that the amount is directed to the targeted bank account.