Subsequent to demonetisation, the number of online money transfers from one account to another account has increased radically. The popularity of these online transfers stems from the fact that they are easy to make and beneficiary can receive the money in his/her account almost instantly. When making domestic transfers from one account to another, the IFSC often called IFSC code is a key bit of information that facilitates the transfer. Nevertheless, few of us know what the code stands for or why it is vital for making online bank transfer.
About IFSC
IFSC stands for Indian Financial System Code. It is an alpha numeric code that facilitates electronic or online funds transfers within India. When making a bank transfer, it is necessary to identify the bank and the branch where the beneficiary account is held and the IFSC Code is designed to do just that. That is why the IFSC is mandatory for various bank transfers such as NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement).
IFSC comprises an 11-digit alphanumeric code that is unique to the banking institution and the branch where the beneficiary account is held. The first four characters represent the bank name and the last six characters represent the branch. The fifth character is usually a zero and has been saved for future use. The code of every branch is mentioned on the cheques of the account holder.
For example, if you see an IFSC code as HDFC0000280, then you can easily see, that the first 4 characters represent the name of the bank, which in this case is HDFC Bank and the rest including the zeros represent a specific branch of HDFC Bank, which in this case is located at First India Place in Gurgaon. No other branch in the HDFC banking network can have the exact same code and this code will have to be provided when initiating a NEFT or RTGS transfer.
How to Find IFSC
When you apply for a savings account, few of us pay any attention to the IFSC code even though it is printed on the chequebook that most of us receive with the bank account. However, that’s not the only place where you can find your IFSC. You can log on to Paisabazaar.com and navigate to the IFSC Code Locator in the Tools menu. On that page, you can input details such as Bank, State, City and Branch Name to get the IFSC instantly.
Important facts about IFSC Code
In case of something we use regularly such as IFSC, we take a lot of things for granted. The following are some must know but often missed facts about IFSC.
It is allotted by RBI
It is a misconception that IFSC Codes are created by banks themselves. The RBI is the only authority empowered with generating and allotting IFSC to various bank branches through the head office of the banking institution. The RBI maintains a record of IFSC Codes for each bank and branch in India offering online fund transfer facility to the consumers. You can visit the RBI website to get the IFSC Code for your desired bank branch. The link is given at the footer menu on Reserve Bank of India’s home page and clicking on it will take you to a page where you can choose your bank from the drop down menu and type in the branch name to get the code of a specific branch located in India.
Uniqueness
IFSC Codes are unique for every bank and its branch. It can be said to be similar to the PNR number used in train reservations, which ensures no two passengers have the same seats in a train. IFSC Codes are also generated on this concept for fast, easy and confusion-free online funds transfer. In fact, NEFT and RTGS transfers are currently made based on just the account number and the IFSC.
RBI Has Complete Authority over IFSC Code
RBI has complete authority over the IFSC Codes, from their generation to their alteration and cancellation. It is not usual practice for RBI to change the IFSC Codes for any bank or branch but it the central bank retains the authority to make those changes if necessary. Even if the IFSC Code for anyone’s bank or branch is changed, the new code can be easily obtained from the bank. Account holders should also ask for new chequebooks mentioning the new IFSC Code, if there a specific branch’s IFSC has changed.
Resolving IFSC Code Errors
As with any code, it is possible to make a mistake in entering the IFSC Code when making a money transfer. One should therefore double-check before clicking the ‘submit’ option and initiating the transfer. Entering wrong IFSC Codes may lead to problems in getting the bank transfer completed. In most cases, the money reverts back to the sender’s account. In rare cases, the wrong account gets credited. Though there are ways to recover the misplaced funds in such cases, the process is quite lengthy.
Tips to Ensure Correct IFSC Usage
Considering the importance of IFSC Codes, the following are some IFSC-related tips to avoid mistakes while transferring money online:
- Verify the IFSC Code from reputed websites such as RBI, bank website and Paisabazaar.com
- Always double-check the account number and the IFSC Code before clicking the ‘Add Beneficiary’ or ‘Submit’ buttons on the screen
- After you have added a new beneficiary account, transfer a small amount such as Rs. 10 into the receiver’s account and wait for their confirmation to ensure that details provided by you are correct. Transfer larger amounts only after the receiver confirms the receipt of the test amount.
2 Comments
When we give some one our IFSC code than they can just credit the money right and they cannot debit the money from the one’s account?
Thanks, it’s quite informative