IFSC Full Form

The full form of IFSC stands as  the Indian Financial System Code, also known as an IFS Code. It is an alphanumeric code that helps the process of  sending the funds from one bank account to another. The IFSC contains a total of 11 characters, each representing a different and distinct feature. The first four digits of the code represent the bank code, whereas the last six characters stand for the respective branch code. There is no use of the 5th character in an IFSC, the RBI has reserved it for future purposes. The Reserve Bank of India (RBI) has made it mandatory that all banks must print the IFSC Code on the passbook and cheque book. However, this code, assigned by the RBI, varies from bank to bank. Use of IFSC code has made the transactions easier and safe from fraud and crime.

What is IFSC Full Form?

IFSC full form stands for Indian Financial System Code. It refers to an 11-digit code that is alphanumeric and facilitates the electronic fund transfer mechanism in India, wherein each code happens to identify the banks that would participate in the RTGS and NEFT systems which are commonly used as a fund transfer mechanism in India.

How Does IFSC Work?

The “Indian Financial System Code” is a code consists of alphanumeric characters which facilitates banking services like electronic fund transfers in every region of India. The banking network in India is known as one of the most delicate chains of networks among all the other banking services in the world. Although the banking services in India are regulated by the statutory body of banking known as “Reserve Bank of India”. All the financial transactions in various banks are made with the help of the IFSC code and it helps the “Reserve Bank of India” to track the flow of money in the economy. This helps in monitoring and administering the function of different banks in different regions which is very significant in the development of banking services.

What is the Importance of IFSC code

IFSC can be known as the essential factor for the fund transfer, which is used by the different modes of making the payment. They are the authentic identification of the account to which bank they belong and the precise location. IFSC Code can be collectively considered as a bank code that represents all the accounts opened in a branch. IFSC codes also act as the tracker which can be used to track and check the fund transfers from one account to another. Following are the functions of IFSC code that results in the safe transactions:

• RBI provides the IFSC Code to every customer for the identification and classification of banks and their branches that provide RTGS, IMPS and NEFT facilities.
• IFSC code allows RBI to verify and evaluate financial transactions without disruption, error or fraud.
• RBI can administer and channelise all online banking transactions via IFSC code, explicitly RTGS, NEFT and IMPS.

How to Find a Bank by IFSC Code?

• The first four alphabetical characters in IFSC Code would be about the bank’s name, so one can be certain about the bank they are trying to locate. 

For Example: The IFSC code HDFC0001756 would strongly refer to HDFC bank, as indicated by the code’s first four letters.

• Further, with the advent of advanced technology, numerous websites would detect and help one find the concerned bank/branch that one is trying hard to look for. With a single click of a button, one can be sure and are able to find the bank/branch he is trying to locate and identify.

Use of IFSC Code in Banking?

The uses of IFSC can be observed in all the funds transfer happening through the option of internet banking and mobile banking service. However, the transfer of funds by the means of UPI is not considered in this kind of transfer. Although with the varied payment options available, the transfers of money can be done with the help of IFSC if the customers are using UPI applications to transfer to any account without the UPI. The IFSC is used to transfer the funds through various processes like “NEFT, RTGS or IMPS method”, where the NEFT full form is “National Electronic Fund Transfer”. RTGS full form is the “Real-Time Gross Statement” and the full form of IMPS represents the “Immediate Payment Service”, which are different fund transfer methods.

NEFT and RTGS Working Procedure

In NEFT the userneeds to have the beneficiary added to the bank account to make the fund transfer to another account no matter whether they are from the same bank or a different bank. The beneficiary is created with the help of the IFSC code, it can be found in the bank passbook or the cheque of the respective account. The similar process is associated with RTGS but the crucial difference is the amount and duration of the process, it takes less time than NEFT and range of transfer is more in numbers i.e Rs 2 Lakhs to Rs 5 Lakhs with a charge of Rs 30 per transaction. The charge per transaction can increase if the transferred amount is more than Rs 5 Lakhs, and this service works from 9 AM till 4: 30 PM on weekdays and till 2 PM on Saturday. The IFSC codes are also used in IMPS service. IMPS work 24*7 with the help of MMID or mobile money identifier code, with 7 digits issued solely by the bank.   

Why is IFSC Code Significant in Banking?

IFSC Code is required in the banking process due to various reasons. Few of the reasons are:

• Whenever a person wants to undertake some transfer of money to another bank account of any other member, it becomes understood that the person knows the code of the transfer where the account is held. As it becomes an important part of the process to have the money transferred. Hence, it becomes important to know the branch where the account is held so that the RTGS (Real Time Gross Settlement) and NEFT (National Electronic Funds Transfer) can be undertaken disruptively. IFSC code thus becomes an imperative mandate in such cases. This alphanumeric code enables the smooth online transfer system in India.
• Moreover, due to IFSC codes, one need not waste a long time standing in queues and can have the same amount transferred across the globe without further complications. Due to the presence of IFSC code, one can have the comfort of sitting at home and transferring money at his fingertips due to technology’s advent.