How IFSC Code Works ?

Internet has changed the way business are done. Increasing consumerism has forced companies to come out with innovative solutions for satisfying the needs of the people. Banking sector too has evolved in terms of technology used to deliver quality service to customer. People use net banking very regularly. It is very convenient for them to use this service.

How IFSC code made
To do any kind of transactions online, one has enter the ifsc code of the bank. The first four letters represent the bank code. For e.g. the IFSC code of SBI will start with SBI letter. Since there are lot of banks with many branches, the bank uses IFSC code for quickly identifying the bank for transaction.

IFSC code are important while doing any payment transactions. Every cheque has IFSC code mentioned below the cheque. While doing online transactions also, one has to enter the IFSC code of the bank with whom the transaction is being done.

The first four letters represent the bank and the last 6 letters represent the branch of the bank. It can be alphabetical or numeric. These codes are important for doing RTGS or NEFT transactions. For e.g. an ICICI bank IFSC code will be ICIC0000985 for banker branch in Pune located in a location in Sai Prestige building.

IFSC code uses RTFS and NEFT modes for doing any kind of transaction. These two type of payment gateways – NEFT and RTGS rely on IFSC code and other details for executing any kind of payment transactions. These electronic payment gateways were introduced to encourage paperless transactions. To inculcate the eco-friendly behavior in consumer.
One can also use mobile phone for transferring payment. It is done through IMPS. IMPS stands for Immediate Payment Service. This service was introduced in the year 2010. It is now even possible to avail this service through ATM and internet banking.

NEFT stands for National Electronic Fund Transfer. It is done to transfer funds electronically. It can be called an e-cheque also. For real time transactions you can use RTGS which is Real Time Gross Settlement. RTGS transactions are preferred for making immediate transactions.

One can find the IFSC code of the bank online. While doing net banking also one can search for IFSC code by inputting specific information like the branch name. The RBI website has all the information regarding the IFSC codes of all the banks. If you still cannot find the IFSC code then you call the bank and know the details. It is also been made mandatory by RBI to print IFSC code on the cheques of all the banks.

There is more progress done in relation to identifying the bank and the branches while doing the transactions. The banking system of India is slowly progressing towards IBAN system – International Bank Account Number Integration.
Thus IFSC code is an important part of doing any kind of online transaction. In one way it is a catalyst towards Indian government’s ambitious venture – ‘Digital India’. More developments are expected to happen in the banking sector.