News: Printing of MICR, IFSC Codes a must on Passbooks by RBI

Nowadays, transferring funds takes only a couple of hours, even between different banks. Gone are the days when it would take up to a week to get a cheque cleared. This has been possible solely through the use of electronic and computer technology in the banking system. The two of the most popular electronic codes used by a bank are the MICR and IFSC code.

The IFSC Code: 

The IFSC or Indian Financial System Code is a code which identifies the branch of a bank participating in the two primary kinds of electronic funds transfer system: the RTGS or Real Time Gross Settlement and the NEFT or National Electronic Funds Transfer system. 

• The code contains 11 characters with the first four characters being alphabets that represent a bank name and the last six characters being a mix of alphabets and numerals. 

• The remaining character is a zero “0” which is reserved for use in the future. 

• The code is used by RTGS and NEFT systems for routing messages to destination branches/banks.

Whenever you wish to make a transfer, you have to provide the IFSC code of the branch of the account to which you want to transfer money to. If you are unaware of the IFSC code, you can look up the official website of the bank and enter the name of the branch or BankBazaar.com, to find out the IFSC code.

MICR Code:

MICR Code or Magnetic Ink Character Recognition code is a technology for character recognition used by the banking sector for easing clearance and processing of cheques and other papers of transaction. The MICR is encoded at the MICR line which is placed at the bottom of a cheque and other memos. It includes a document based indicator including the bank account number, bank code, cheque amount and number along with a control indicator. 

On your cheques, the MICR code is the six digit cheque number and the numbers which are typed beside that, towards the bottom of the cheque. Usually banks advise you to not fold the cheque or write anything on it in a manner to spoil the MICR line as the computer would not be able to read the information encrypted on it.

Mandatory Inclusion of IFSC and MICR Code on the Passbook:

The central bank of the country, the Reserve Bank of India has made it compulsory for all the banks in the country to print the IFSC and MICR code on the account statement and passbook of customers. The decision was taken back in 2012 and has been adopted by all branches of all banks across the country. Earlier, the MICR and IFSC code was available only on cheque leafs. However, the RBI decided to make this information available to account holders on their passbook and statement of account too for easy reference.