What is IFSC Code?
Indian Financial System Code, a unique code, assigned to each bank. IFSC code is required to for many banking transactions.
IFSC Code vary from branch to branch with a few similarities for a bank.
More detailed explanation of IFSC code is mentioned on the left side.
If you are a customer of any bank, you should know IFSC code assigned to that bank for your own benefits.
With the IFSC code you can easily manage your account from any corner of the globe to transfer fund through various sources.
You need to know the IFSC Code for adding beneficiaries. IFSC code is must to have online fund transfer.
IFSC stands Indian Financial System Code. IFSC is an alpha numeric code which uniquely
identify bank branch in india. IFSC is code used for various payment system within
the country. IFS Code is 11 digit code for a bank branch.
- First 4 characters represents bank code.
For Example: One of the IFSC code for ICICI Bank is ICIC0001206. First 4 characters
ICIC0001206 represents bank code.
- The 5th character is a '0' Zero and it's reserved as control character (ICIC0001206)
- Remaining last 6 characters used to indentiy the bank branch. (ICIC0001206)
Reserve Bank of India (RBI)
Reserve Bank of India (RBI) is the central banking institution of India. Its fully owned by government of India.
RBI controls Indian rupee and all indian banks.
RBI has also control on inter bank money transfer in all over India banks through RTGS and NEFT.
RBI was established in April 1, 1935 and nationalized in 1949.
Reserve Bank of India has rights to issue, exchange or destroys currency notes and coins in India.
This bank also maintains all merchant banking account for state and central banks.
NEFT (National Electronic Fund Transfer)
NEFT stands for National Electronic Fund Transfer.
NEFT is an online national wide fund transfer system supported by RBI.
It is used by an individual, firm and corporate to transfer payment electronically.
NEFT is used for small and medium amount transfer between banks and accounts.
No minimum amount limit for NEFT.
NEFT process transfer funds on hourly batches.
In week days there are 11 settlements, starts at 9 A.M and ends at 7 P.M
and in Saturday there are 5 settlements, starts at 9 A.M ends at 1 P.M.
Usually the payment will be send to the RBI within 3 hours when remitting account given request for transaction.
The actual time to take transaction completed depends on beneficiary bank to process the funds.
- Eco-friendly - The total process of NEFT is eco-friendly and drastically reduce paperwork
- Economic efficiency - NEFT fund transfer service charge is much less compare to making transfer by using pay order or demand draft
- Secure and efficient - Seamless transfer of funds from one bank to another.
During the transaction there are no chances to occur mistakes and whole operation is highly secure and quick
- Risk free - There is no credit and liquidity risks in NEFT payment system.
The fund transfer request is processed and settled in day’s time.
NEFT service charges
From March 31, 2011 RBI refrain from insisting the service charges to the banks.
Banks who are participating in NEFT fund transfer no need to pay any charges to RBI.
There are no charges from beneficiaries for payment transfer.
- Outward transactions - less than 1 lakhs - Rs. 5
- Outward transactions - 1 lakh to 2 lakhs - Rs. 15
- Outward transactions - above 2 lakhs - Rs. 25
RTGS (Real Time Gross Settlement)
RTGS stands for Real Time Gross Settlement. It is a fund transfer system used to transfer money from one bank to another.
This gross basis transfer is a real time transfer system.
This system can performs for large value of transaction, minimum amount can be transferred is Rs.2,00,000.
There is no maximum amount limit for this transaction.
The time taken for receiving funds to beneficiary account in real time when the remitting bank transferred funds.
The remitting customer can receive acknowledgment from RBI when the fund gets transferred.
The RTGS payment system was launched on 26th, March 2004 by RBI with involving only four banks.
Now there are almost 109 banks in 13750 branches and 508 clearing centers.
More than 800 cities are covered for customer transaction.
Benefits of RTGS
- Real time fund transfer
- Efficiency of economy - Without exposing settlement risk, the payments are ensuring quick and secure in financial market transactions and major business solution.
- Credit risk eliminated - There is no credit and liquidity risks in RTGS payment system.
The beneficiary bank customer can receive payment instantly when the central bank system accepted request.
The following instructions are used in this structure.
- The remitting bank will be send payment instruction to central processer’s technical operator
- The central processor acknowledge the stripping of message and sending original message with set of instructions
like, what amount to be transferred, what is the IFSC code of bank branch, issuing and receiving banks identification etc. to central bank
- The central bank process debit of remitting bank’s account and credit to beneficiary bank’s account.
After transaction completed then, sending confirmation to central processor
- The central processor re-constructing of payment message with stripped information
and send the message to receiving bank with proper details
RTGS service charges
- Inward transactions - Free, no charges
- Outward transactions - 2 lakhs to 5 lakhs - Rs. 25
- Outward transactions - Above 5 lakhs - Rs. 50