Importance of IFSC code While Transferring Funds
Technology has made a significant impact in digital banking. Now it is possible to transfer amount with a minute from one account to another at just a single click of a button. Indian government is further encouraging companies in all the sectors to go digital. The IFSC code plays an important role here. It helps banks in understanding the bank branch to which the money has to be transferred. All branches have different IFSC code. One can just search for State bank of India IFSC code to get the details of SBI branch is wanted. IFSC stands for Indian financial system code.
For a layman, things are made easy to do online transactions. It saves a lot of manual tasks, saves money and time. Also for banking it is important to keep the records clean and well maintained which is possible only through technology. So IFSC code helps the RBI in knowing the transactions carried out in that particular branch.
So how online transactions done and what is the significance of IFSC code?
IFSC code is not only important for online but also for offline transaction. RBI has made it mandatory for all the banks to write IFSC code at the bottom of the cheque. While doing online transfer also, one has to specify IFSC code without which funds cannot be transferred. For example if one is transferring money in payee’s account who holds account in Axis Bank then there is Axis bank IFSC code of the particular branch which he/she has to enter.
After entering the IFSC code, other details like the account number and amount has to be entered. If by mistake a wrong IFSC code is entered then the transaction is not successful. As all the branches of bank have unique IFSC code.
IFSC code is a 11 digit alpha numeric number. The first 4 letters signify the bank name. Last digit signify the bank branch. All kinds of transactions whether it is RTGS, NEFT or IMPS require an IFSC code. With so many transaction carried out every day, it is difficult to keep a track of all the banking activities which are carried out. So it becomes important that banks get accurate signals regarding receiving and sending money from one account to other. This is possible only through IFSC code.
More systems will get into place as India moves towards its ‘Digital India’ plan. IFSC code and similar other codes will be introduced to ensure safe banking. There are different websites through which one get to know the IFSC code if it’s not known. Even the RBI website displays information of all the IFSC codes of bank branches. You can also call the customer care of the bank to know the IFSC code.
Thus IFSC code plays a significant role in making the financial system robust and strong. Without it there can be a lot of confusion and errors which can be created by banks in carrying out the transaction. IFSC code has helped in automating things and made it simple for normal people to carry out banking transaction smoothly.
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