Full Form Of IFSC

What is the full form of IFSC?

IFSC stands for Indian Financial System Code, an 11 character alphanumeric code that helps smoothen the progress of electronic payments in India. It helps identify and classify each branch of the bank so that an individual can easily and immediately describe a bank and its branch using it. IFSC code is written in the checkbook.

It recognizes and differentiates between the branches of the bank that allow the following methods of settlement and payment in India:

1. RTGS: It stands for Real-Time Gross Settlement where the beneficiary bank provides direct transfer instructions and since payments are final they cannot be withdrawn. Each transaction is done individually as the payment is gross.
2. NEFT: It stands for National Electronic Fund Transfer System, a centralized nationwide payment method that the RBI owns and controls. You can easily transfer money between banks across India using this method as long as a bank branch is NEFT enabled.

Unlike in RTGS, the movement of funds occurs in batches in NEFT. Due to this hourly intervals are fixed and the settlement is assigned to one such time slot.

How to get the IFSC code of a branch?

Following details are necessary to obtain any bank’s IFSC code:

1. Name of bank
2. Name of the state where the bank is located
3. Name of district
4. Name or address of the branch of the bank

Importance of IFSC code

1. IFSC Code helps in the identification and classification of banks and their branches that provide RTGS, IMPS, and NEFT facilities.
2. RBI can verify and evaluate financial transactions using IFSC code without disruption and error.
3. IFSC code allows RBI to administer and handle all online banking transactions explicitly RTGS, NEFT, and IMPS.

IFSC code format

1. An IFSC code comprises 11 characters where the first four letters state the bank name and the last seven indicate the branch number.
2. For example in the IFSC code SBIN0000738, SBIN describes the bank name, and the number string 0000738 denotes branch number.
3. You can use the IFSC Code to transfer cash from one branch of the bank to another branch via RTGS or NEFT and to perform online and digital transactions.