In today’s world, the monetary transactions are not just limited to a certain bank of a specific country, thus making it mandatory for each and every banking institution to do a proper verification before any kind of funds processing. In order to make this procedure quicker the banking and various financial institutions take help of some codes to automate their process and make it simpler. IFSC and MICR plays a very important role when it comes to transfer funds online.
Let us have a better understanding of IFSC and MICR Codes and their importance
IFSC (Indian Financial System Code) can be better classified as a 11 digit alpha numeric code which is issued Reserve Bank Of India. This unique code is provided to each and every branch of every bank for identification of every bank branch within India. RBI has developed various payment system applications like RTGS, NEFT and and for making all fund transactions electronic in India. All the banks using electronic payment system, are bound to use this unique IFSC code in order to identify each branch of every bank in India to make electronic fund transactions without any hassles.
MICR (Magnetic Ink Character Recognition), as the name suggests is a well known character recognition technology that helps to process the cheques faster. Every branch of bank is handed over a unique MICR Code which helps RBI to identify the bank branch and expedite the clearing of cheques. If you notice, you can find a magnetic ink bar code which is printed at the bottom of the cheque of your bank as well.
IFSC Code Vs MICR Code
• IFSC code is a unique code required to initiate electronic money transfer between banks in India whereas MICR is a Magnetic Ink Recognition technology which is used to process the cheques in a faster and efficient way.
• IFSC code is alphanumeric 11 digits unique code, however MICR Code is a 9 digit unique numeric code.