Importance of IFSC code for fund transfer in India
In the Indian banking system, the IFSC is known as the Indian Financial System Code. This is an 11-digit serial number consisting of a unique combination of letters and numbers. The numbers can be broken down as follows – the first 4 numbers are alphabetical, denoting the bank, the fifth number is a single digit 0 (zero) which will be used by the bank in the future, and the last 6 numbers are either an alphanumeric combination or just numeric numbers identifying the bank branch. Unique serial numbers are assigned by the RBI to all bank branches using the EFT systems.
Reserve Bank of India (RBI)
The RBI, as a centralized banking authority, also supervises the transfer of funds between Indian banks under the RTGS and NEFT systems. The official website of RBI shows a list of all the banks in Indian states and union territories that participate in this system. Banks offering net banking services and participating in the Electronic Funds Transfer (EFT) system must provide bank identifiers to their customers.
Ways to Find IFSC Code
Online and net banking customers should be fully aware of the beneficiary bank’s IFSC code for sending or receiving payments within the country using the RTGS (Real Time Gross Settlement) and NEFT (National Electronic Funds Transfer) systems. Individuals, corporates and firms with or without a bank account can also transfer money, but that bank must be a participant in the RBI-regulated EFT system. The official website of the Reserve Bank of India provides the complete list of banks participating in EFT.
There are different ways to find your bank’s IFSC code. Most banks print these unique characters on the leaf of the check book, but if they are not printed on a check leaf, you can call the customer care department of the said bank and get the IFSC code. The third method that can provide you with these unique numbers is to visit the financial internet sites because there are websites that provide information about bank details, NEFT status of the bank, branch address, branch location and IFSC code.
It is also necessary to remember that Banks’ unique identifiers are changed from time to time by RBI and you should contact the bank branch for confirmation of the identifiers obtained from third party sources. An incorrect code may prohibit the transfer of your payments.
NEFT and RTGS systems
NEFT and RTGS systems for remittance and receipt of funds are maintained by the Reserve Bank of India. The main differences between these two systems include:
BUTTER– There is no minimum or maximum limit for transferring funds under this system and the money reaches the beneficiary bank within 24 hours to 48 hours.
RTGS– This system is the fastest way of payment transfers and payments can arrive in no time. Transactions are made on a “real-time” and “gross” basis, not grouped with other transactions. The minimum fund transfer amount is Rs. 1,00,000 or more and the payment is credited to the beneficiary’s account within 2 hours.
You must remember that whatever payment systems you use, the IFSC code is vital for your fund transfer and these unique numbers are only valid for intra-bank fund transfers in India and not valid for international fund transfers. You will need to use a SWIFT or BIC code to transfer funds abroad.
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