The Reserve Bank of India provides each bank branch in India with a code known as the IFSC. This one-of-a-kind number is a mix of an alphanumeric code and a number, and it is uniquely assigned to a certain bank branch. For certain electronic fund transfers, such as RTGS, IMPS, and the NEFT, the IFSC code is essential.
In this article, we will analyse the IFSC code and determine whether or not it has 11 digits. Specifically, we will look at the format of the code.
Breaking down IFSC Code
The Reserve Bank of India assigns each financial institution in India an 11-digit identifier known as an Indian Financial System Code, or IFSC Code. Online money transfers like NEFT, RTGS, IMPS, etc., need an IFSC Code to identify the receiving bank and branch properly.
The first four letters of an IFSC reflect the bank’s name, while the next six characters (often numbers but sometimes letters) identify the branch’s location. The value 0 (zero) serves no useful function as the fifth character.
Is there any fallout for entering an incorrect IFSC code?
When transferring funds, if the sender inputs the erroneous IFSC code, the money will be taken out of the sender’s account, but it will not be transferred to the beneficiary’s account since the sender entered the wrong IFSC code.
For example, suppose the beneficiary’s account is held with SBI, and the wrong IFSC number belongs to another branch of SBI. In that case, the institution will conduct an internal clearance to deposit the money to the beneficiary’s account. If the remitter’s bank is the one with the wrong IFSC code and the code belongs to another bank, the remitter has to make an application at the branch of his bank along with his bank information and the transaction ID.
How does a bank merger affect the IFSC code?
If the bank goes through the process of merging with another institution, the IFSC code will be updated. Following this, the customer will be provided with a new 11-digit IFSC code, shown on bank papers such as the bank passbook and the chequebook, respectively. This is done to guarantee that the recipient of any online financial transactions will have their funds deposited into their account.
FAQs
Does the IFSC code stay the same even if a branch is merged?
A unique IFSC code is assigned to each branch of a bank. In conjunction with a bank account, this alphanumeric code is used to identify a particular transaction. Even if a participant's account number remains the same, after some time, the corresponding bank IFSC code will no longer be valid due to branch amalgamation.
Can I input the IFSC code without worrying?
IFSC codes enable all banking to be completed digitally. Banks and branches have unique codes to use during transactions, making them completely safe. That's why there's no room for theft or fraud. In the presence of valid IFSC codes, unauthorised access is quite unlikely.
Do I need an IFSC code to transfer funds?
Yes, since an IFSC code is required to make an online payment.
In what ways are IFSC codes useful?
Every electronic payment system, comprising RTGS, NEFT, and the CFMS, uses the Indian Financial System Code (IFSC). When moving funds from one account to another, you need to provide this code as a requirement.
