If you have ever transferred funds online, you must be familiar with the term IFSC code. You must also have noticed these codes printed on passbook and cheque books. Also, you can check the IFSC code of any bank branch by using the IFSC Code Finder provided on the official website of the RBI. While it is common to use the IFSC codes now, do you know why it is used and what its unique features are? In this blog, we have tried to explain the meaning of IFSC codes in a simplified way and mentioned their unique features. Please read on!
What is an IFSC code?
The full form of IFSC is the ‘Indian Financial System Code’. It is a unique 11-digit code used to identify banks and their branches while transferring funds online. All the online payment systems in India, such as RTGS, NEFT, and IMPS, depend on it; therefore, it is an integral part of the Indian banking infrastructure.
Every IFSC code has 11 alphanumeric characters, of which the first four characters are alphabets and representative of the specific bank. The last six characters are numerics and represent the bank branch. The number zero is the fifth character of the code; it is always constant.
Features of the IFSC Code
- The IFSC code helps identify the specific bank branch uniquely, as no two bank branches have the same IFSC code.
- It facilitates all electronic transactions such as RTGS, NEFT, and IMPS, eliminating errors in the fund transfer procedures.
- Unless there is a merger or a reorganisation, the IFSC codes can’t be changed, revised, or updated by a bank.
Examples of IFSC code
IFSC Code SBI: SBIN 0 032277
The first four characters of the code are ‘SBIN’, which represent the bank- State Bank of India. The fifth character is zero, and the last six characters are digits ‘032277’ that represent the Rajouri Garden, New Delhi branch of SBI.
IFSC Code SBI: SBIN 0 070837
The first four characters of the code are ‘SBIN’, which represent the bank- State Bank of India. The fifth character is zero, as always. The last six characters, ‘070837’, represent the bank branch, here Janakpuri, New Delhi branch of SBI.
Please note that while the first four characters are the same for different branches of the same bank, the last six digits are different for every bank branch, even if they are in close proximity to each other. To know IFSC Code SBI of different bank branches, you can use the IFSC Code Finder provided on the RBI website.
Interesting Points about IFSC Codes
- Currently, around 130,000 IFSCs are operating in India that have been assigned to different bank branches by the Reserve Bank of India. A database of these codes is maintained by the RBI, and the list is regularly reviewed to make additions or deletions based on the requirements.
- RBI has introduced a new banking model called payment banks. These banks are allowed to conduct certain banking operations such as accepting deposits upto Rs. 1 lakh and offer mobile banking, net banking, ATM, and debit card facilities to their clients. However, they are not allowed to issue credit cards or lend funds. Currently, the payment bank licenses have been awarded to four companies in India, including India Posts, PayTM, Airtel, and Fino. The Reserve Bank of India has assigned these payment banks their own individual IFSC codes.
IFSC codes are integral to a safe and secure online banking system in India. The use of these codes ensures that the funds you transfer online reach the intended bank account. Therefore, the chances of errors and mistakes are eliminated. We hope this blog helped you understand these codes in detail and acquainted you with their features. You can check out our other blogs on IFSC codes for more information.
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