Indian Financial System Code: Difference between revisions

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IFSC or '''Indian Financial System Code''' is an [[alphanumeric code]] that uniquely identifies a bank-branch participating in the [[NEFT]] system. This is a 11 digit code with the first 4 alphabetic characters representing the [[bank]], and the last 6 characters (usually numeric, but can be alphabetic) representing the branch. The 5th character is 0 (zero). IFSC is used by the NEFT system to route the messages to the destination banks / branches.<ref>[http://www.rbi.org.in/scripts/FAQView.aspx?Id=60 Reserve Bank of India]</ref>

IFSC or '''Indian Financial System Code''' is an [[alphanumericalpha-numeric code]] that uniquely identifies a bank-branch participating in the [[NEFT]] system. This is a 11 digit code with the first 4 alphabetic characters representing the [[bank]], and the last 6 characters (usually numeric, but can be alphabetic) representing the branch. The 5th character is 0 (zero). IFSC is used by the NEFT system to route the messages to the destination banks / branches.<ref>[http://www.rbi.org.in/scripts/FAQView.aspx?Id=60 Reserve Bank of India]</ref>

NEFT is a system that functions across the nation and allows all individuals, firms and corporate to transfer funds, via an [[Electronic funds transfer|electronic medium]], from any bank to a individual, firm and corporate holding a bank account in any bank in the country, which is under the scheme. To be a part of the NEFT network the bank has to be NEFT-enabled. NEFT functions in hourly batches, which are from 9am to 7pm on weekdays and 9am to 1 pm on Saturdays.

People who don’t have any [[bank account]] (walk-in customers) can also avail services of the banks under the NEFT scheme, however their [[money transfer]]s are restricted to Rs 50,000 per transaction and they have to submit complete information about themselves.

The NEFT scheme allows one way transfer of money, across the border of [[India]] and [[Nepal]] which is known as the Indo-Nepal Remittance Facility Scheme. A person from India can easily transfer funds to any NEFT enabled bank in Nepal, wherein it is not necessary for the other party to have a bank account with a bank in Nepal. The transaction takes place in Nepalese currency ([[Nepalese rupee|Rupees]]). However, the limit of such a transaction is Rs. 50,000.

Bank-wise list of IFSCs is available with all the bank-branches participating in NEFT. List of bank-branches participating in NEFT and their IFSCs is available on the website of [[Reserve Bank of India]] at http://www.rbi.org.in/scripts/neft.aspx. All the banks have also been advised to print the IFSC of the branch on cheques issued by branches to their customers. For net banking customers many banks have enabled online search / pop-up of the IFSC of the destination bank branch.

'''WORKING OF NEFT'''

The individual, firm or corporate who intends to begin the process of transferring funds needs to fill in an application form which contains details about the beneficiary (name of the beneficiary, name of the bank in which he holds an account, account number, IFSC, etc) and the amount involved. The originator allows his bank to debit funds from his account and transfer them to the receiver’s account. Certain banks also provide this service through their [[ATM]]s as well as through online transactions. The second step is where the originator banks sends a message to the NEFT Service Centre which is then forwarded to the NEFT Clearing Centre. The job of the Clearing Centre is to sort the funds according to the destination of the banks and also enters transactions into the books of accounts regarding the amount received by the originator banks and the amount to be remitted to the destination banks. The destination banks then receive the message from the Clearing Centre and forward the credit to the beneficiary customer’s account.

<references />

Bank-wise list of IFSCs is available with all the bank-branches participating in NEFT. List of bank-branches participating in NEFT and their IFSCs is available on the website of [[Reserve Bank of India]] at http://www.rbi.org.in/scripts/neft.aspx. All the banks have also been advised to print the IFSC of the branch on cheques issued by branches to their customers. For net banking customers many banks have enabled online search / pop-up of the IFSC of the destination bank branch.

'''BENEFITS'''

#There isn’t a need for the remitter to send a [[demand draft]] or a [[cheque]] to the other party.

#The beneficiary saves the effort of visiting his bank with his documents and paper instruments.

#It is a cost effective system.

#There isn’t any fear of [[fraud]]ulent transactions or loss/theft.

#Confirmation of the credit is confirmed by way of [[SMS]] or [[email]].

#[[Internet banking]] has further helped in making the system convenient and user friendly.

== References ==

{{Reflist}}

[[Category:Banking in India]]