A healthy economy requires a financial system that moves funds from people who save to people who have productive investment opportunities. But how does the financial system make sure that your hard-earned savings get channeled to the productive investor rather than to non-productive investor? It needs well defined financial system controlled by Govt. or its agency. In India, its by Reserve Bank of India (RBI) which has authority to control any financial business entity run in India. Through a simple code (IFSC), every banking transaction under RTGS, NEFT, IMPS, and CFMS can be monitored by RBI without any hindrances.
What is IFSC Code?
IFSC Code is the acronym for Indian Financial System Code developed by RBI - Reserve Bank Of India as a unique Identification code to each of the bank branches in India. The Bank IFSC Code consists of 11 alpha-numeric characters that uniquely identifies a bank-branch participating in the RTGS and NEFT system. The Payment System Applications such as Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT) and Centralized Funds Management System (CFMS) uses Bank IFSC code to identify the transaction data.
How Bank IFSC Code Works In Banking Transactions?
For example, CNRB0001995 is the IFS Code for Canara Bank, Chandigarh Branch which can be explained as follows:
- First 4 characters represent the entity of the Canara Bank - CNRB
- Fifth position has been defaulted with a ''0'' (Zero) for future use - CNRB0
- Last 6 characters represent the identification number for the bank branch - 001995
As we can see the first four characters are the Bank's code, the fifth reserved for future putting "0" (Zero) and the last 6 numeric characters are pointing to a particular bank branch.
Above image shows the usage of ISFC code when we transfer fund to another account.
How do you find Bank IFSC Code of your Bank Branch?
SB account holders can easily find their bank branch IFSC code from their account passbook or monthly statement. If some want to transfer fund to your account through netbanking, they will need your bank's IFSC code. If you want to transfer fund electronically ie., netbanking, from your account to someone's account, you have to collect their bank's IFSC code and fill it up in the prescribed field when you add beneficiary name.
The best way to get accurate IFSC code of a particular bank branch, it is highly advisable to visit concerned bank's website and browse "locate branch" section. Links to each commercial banks functioning in India is listed here making your journey to find IFSC code of concerned bank.