With Internet banking becoming such a growing phenomenon, banks have to increase the accuracy and security of such transactions. One of the ways to do this is by making details such as the IFSC number of participating banks a mandatory prerequisite when conducting these digital transactions.
What is the IFSC Code?
The Indian Financial System Code is a unique 11-character alphanumeric code that is given to a bank branch if it facilitates online banking. An IFSC like HDFC0000485 is made up of three parts: the first four alphabetic characters identify the name of the bank, the fifth character is a ‘0’ that is saved as a buffer for future expansion, and the last six characters are those that represent the branch of the bank. bank. address and are usually numeric, but can also be alphabetic.
IFSC is used when making funds transfers via electronic means through services such as National Electronics Fund Transfer (NEFT), Real Time Gross Settlement (RTGS) and Immediate Payment Service (IMPS). To successfully complete such a transaction, the payer must have the IFS Code of the beneficiary’s bank.
IFSC Benefits
• Save time and money:
The biggest advantage of online banking over conventional banking is that it saves time. You can skip the traffic, queues and formalities of conventional banking and complete your banking transaction within minutes at your comfort and convenience. IFSC facilitates such transactions online and saves you time. Also, online banking enabled through IFSC helps make banking paperless and therefore saves money. This electronic banking is also respectful of the environment, as well as being simpler and faster.
• Shortest transfer time:
IFSC-enabled online banking also saves the time, effort and money required by conventional services, such as demand drafts and bank checks, for a successful transfer of funds. Also, the transaction is immediately reflected in the sender’s and beneficiary’s accounts as the IFSC details are already confirmed. Plus, aside from the bank’s service charges (if any), there’s no additional money spent to make such a quick transaction.
• Safe and transparent:
For online banking, users are required to submit key credentials, including the beneficiary’s IFSC, which is then verified by the bank. Only after verification from the payer’s bank, a user can make an IFSC-enabled funds transfer. This makes the process safe. Furthermore, as online banking through the use of IFSC removes the factor of human interference from the financial transaction process, online banking becomes more transparent and accountable and reduces the possibility of any type of fraud taking place in the system. Also, in online banking, since both the sender and recipient of the account are informed of the transaction immediately via SMS or email, such banking is less susceptible to fraud or any loss.
• Aid in Bank Reconciliation:
IFS codes are unique to each participating bank branch, and this is how they help in the reconciliation and validation of a bank’s data. Without IFS codes, the accuracy of electronic transactions will decrease and banks are in danger of making inaccurate transactions. Also, since all banks are now digitally enabled, the online funds transfers facilitated through IFSC help them reconcile quickly. In addition, the IFSC’s mandate for individual and corporate transactions helps banks to disburse funds quickly and correctly. IFSC also makes it easier for banks to communicate and understand transactions between their branches and also with the other banks.
