Speaking of 2015, banks now offer a wide range of services to cater to almost every aspect of an individual’s life. Customers can get loans, avail insurance policies, open accounts or make fixed deposits, start investments and do money transfer, all under the roof of one bank. However, keeping in mind that a bank’s client base consists of customers not only within India but also NRI’s, money transfer is one of the most popular services offered by banks today.
Methods of Money Transfer - IFSC & MICR
There are multiple ways in which money may be transferred, both online and offline, from one account to another. While there are risks involved in the process, the RBI has taken steps to not only regulate and safeguard these offline and online transactions. For offline money transfers involving cheque books or demand drafts, the Magnetic Ink Character Recognition System, also known as the MICR code is a security code printed on cheque books. This code helps speed up the process of cheque clearing by allowing the machine to quickly identify the bank name and branch from where the cheque has been issued. On the other hand, the Indian Financial System Code or IFSC has been developed by the RBI which helps safeguard and simplify the process of online /electronic transactions.
The IFSC is an 11 digit alphanumeric code issued by the Reserve Bank of India (RBI) to all banks participating in the National Electronic Funds Transfer (NEFT) network, which is also used in Real Time Gross Settlement (RTGS) transactions. This code is essentially issued to identify source and destination banks/bank branches in the event of a transaction and can be divided in three parts. The first four characters represent the bank name, the fifth character always being zero and the last six characters represent the branch address. So, for example, the uco bank ramamurthy nagar branch bangalore ifsc code is UCBA0001629 , where UCBA stands for UCO Bank, fifth character is zero and the last six characters (001629) give the branch address.
In order to transfer money via NEFT or RTGS, it is essential to have, among other information, the IFSC code of the bank branch from where the money is being debited and the bank branch where the money is being credited. The entire process of an NEFT/RTGS fund transfer is eco-friendly, takes only a few hours to complete and is extremely safe and secure. Set up by the RBI, the IFSC system has proven to be an invaluable banking instrument in today’s age when time is money. It helps validate, regulate and safeguard the millions of transactions carried out by banks every day, thus helping the economy run smoothly.