Ever wondered why IFSC code is required to transfer money online?

Here is the answer

IFSC, which stands for Indian Financial System Code, plays an important role when it comes to transferring funds online. However, not many individuals who use the code when transferring funds to their near and dear ones are aware of exactly why the code is being used. Read on to find out the reason.

What is IFSC Code?

As mentioned earlier, IFSC stands for Indian Financial System Code. It is an alphanumeric code that is issued to every bank branch that operates in the country by Reserve Bank of India, the country’s central bank. The code helps the central bank identify the bank branch without much hassle.

What is the structure of IFSC code?

The IFSC code is constituted of 11 characters. This is a combination of alphabets and numbers. The first four characters of the code are alphabets while the remaining seven characters are numbers. IFSC code can be divided into three parts. The first part consists of the four alphabets, which signify the name of the bank. The second part consists of the fifth character of the code which is ‘0’. This part of the code is kept for future reference. The final part of the IFSC code is made up of the final six characters and it signifies the specific branch of the said bank. For example, say the IFSC code of SBI’s Bellandur branch is SBIN0041171. Here the first four characters ‘SBIN’ signify ‘State Bank of India’, the next character ‘0’ is for future reference and the final six characters ‘041171’ signifies the code of Bellandur branch.

Why is the 11-character code important?

The 11-character alphanumeric code, which is unique for each branch of a specific bank, can be termed as its identity. This code comes in handy when money is being transferred from one bank account to another as it helps streamline the entire process of electronic funds transfer. In case of any discrepancy when transferring money through the NEFT and RTGS payment settlement systems, RBI can easily locate the source bank and the receiving bank. The main task of IFSC code is to make sure that the entire process of transferring funds online can be made a smooth one for all those using it.

Which methods of online funds transfer need the IFSC code?

The IFSC code is required to be provided for all three payment settlement systems that are used in the country when it comes to transferring funds online. The methods are:

  • National Electronic Funds Transfer
  • Real Time Gross Settlement
  • Immediate Payment Service

Where can you find the IFSC code of a specific bank branch?

The 11-character IFSC code is printed on the passbook and the cheque leaf issued to the customer by the bank branch. Apart from those two places, the alphanumeric code can also be found on the official website of Reserve Bank of India, the official website of the said bank, and on reputed third-party sites like BankBazaar.

How to go about finding IFSC code on the BankBazaar site?

In order to find the IFSC code of a specific branch of a particular bank on BankBazaar, you would need to follow certain steps that are mentioned below:

  • First, visit www.bankbazaar.com
  • Next, scroll to the bottom of the page and click on ‘Bank IFSC Code’.
  • In doing so, you would be redirected to a new page.
  • There, select the name of the bank and branch for which you want the IFSC code. You would also need to select the name of the state and district where the branch is located.
  • Once all the required details are selected, the IFSC details of the bank branch are displayed.

It needs to be mentioned here that the implementation of IFSC-based payment systems have helped banks facilitate quick fund transfer options to the customers. It has also helped in cutting down errors when it comes to transferring funds online.

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