Definition
MICR and IFSC Code
MICR and IFSC are codes that uniquely identify bank branches for processing cheques and electronic transfers.
The IFSC (Indian Financial System Code) is an 11-character code that identifies a specific bank branch for electronic transfers like NEFT, RTGS and IMPS. You will find it on your cheque book and passbook, and you need the payee's IFSC to send money.
The MICR (Magnetic Ink Character Recognition) code is a 9-digit number printed at the bottom of cheques that enables fast, automated cheque clearing. Both codes pinpoint the branch but serve different systems.
When adding a beneficiary for transfers, the IFSC is essential; an incorrect IFSC can route money to the wrong branch, so it should always be verified.
Related terms
- NEFT (National Electronic Funds Transfer)NEFT is an electronic system for transferring money between bank accounts across India, settled in batches around the clock.
- RTGS (Real Time Gross Settlement)RTGS is a system for large-value money transfers that are settled individually and in real time.
- NominationNomination is the act of naming a person to receive the policy proceeds on the policyholder's death, without transferring ownership of the policy.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.