In the banking sector both IFSC and MICR are common terms. Do you know the difference between MICR and IFSC code? MICR and IFSC code both are used for financial transaction in order to transfer money using NEFT and RTGS.
- IFSC code stands for Indian Finance System code.
- IFSC code is developed to initiate electronic money transfer between banks with in india.
- This code is used by electronic payment system.
- To transfer funds, one needs to know the IFSC code, so that the beneficiary gets the funds directly in his account.
- This IFSC code system is used for instant transfer of money using internet.
- MICR is a Magnetic Ink Character Recognition technology used mainly by the banking industry to ease the processing and clearance of cheques and other documents.
- MICR is old system, used for ensuring the safety and security, to facilitate the processing of the cheques.
- This code can be found in all the cheques at the bottom white line which is known as MICR Band.
- This code can be used for international transactions as well.
- MICR code contains details of the cheque such as serial number, the 9 digit number.
- First three digits represent the city, next three digits represent the bank and the last three digits indicates the branch.
Difference IFSC Code and MICR
- IFSC code is to initiate electronic money transfer between banks within India.
- MICR is a Magnetic Ink Recognition technology for making cheque processing faster.
- IFSC code is alphanumeric 11 digits unique code, whereas MICR is a 9 digit numeric code.
Difference is that IFSC Code is used when remitting money through NEFT & RTGS. Where as MICR code is used only on cheque leaves. So, this is largely to with the system of cheques, while IFSC Code is largely to with the NEFT and RTGS system and the same is mentioned on the cheque leaves as well for the sake of convenience. Both are remarkably difference from each other. You cannot remit amounts to a beneficiary unless you have the IFSC Code, which is of great signficance than ever before. So, make sure that you have it before you send and receive money.