When you send money, you want to make sure that your funds reach the intended bank. Transferring funds to the wrong bank can cause multiple problems, the transaction cannot be reversed automatically. You would have to contact your bank, discuss what happened, and possibly wait an extended period of time for your money back. If you even get it back, that is. A big drawback.

Sending funds to the wrong bank can easily be done, either you provide the wrong details for whatever reason, or perhaps the banker is to blame. The point is that it can easily happen.

This is where the IFSC code comes into play.

What is an IFSC Code?

IFSC Code, also known as Indian Financial System Code. An IFSC code consists of 11 characters. Usually the first 4 characters identify the name of the bank. The fifth character is 0. The last 6 characters identify the bank branch. All payment processes, including RTGS, CFMS, and NEFT, use these codes.

Why is the Indian financial system code needed?

Traditionally, the transfer of funds was done over the Internet. Face to face with a banker. You would detail how much money you want to transfer and to which destination bank account. With today’s technology, there has been a massive shift towards online transactions and it is the new trend.

To carry out a financial transaction online it is no longer necessary to be face to face with a banker. You just need to know where the money is coming from and where it is going. As well as the data of both respective banks. Details such as IFSC codes.

What are the benefits of the Indian Financial System Code?

There are numerous benefits to using an IFSC code. To be brief, here is a summary:

• They allow financial transactions online.

Now you no longer have to go to your local branch, stand in line for an extended period of time, just to process small money transfers. With the Indian Financial System Code, it no longer matters where you are. You can make the transaction anywhere in the world.

• They speed up the funds transfer process.

Money can now be transferred in a matter of minutes. Making the whole process much more efficient. This is very useful when you need to transfer money quickly in an emergency.

• Limit potential fraud.

Each branch and their respective banks will have this unique IFSC code. This makes the process safer and more secure. Each transaction using IFSC codes will have a start point and an end point. Ensure funds are easily traced.

• Open 24/7.

Unlike at your local branch, you can access your bank account online anytime, any day.

• On line bank.

You can pay your bills, check your balance and transfer funds, all thanks to the codes of the Indian financial system. Fast and efficient.

Who controls the transfer of funds?

The Reserve Bank of India, or RBI. Established as the central banking institution, it controls all fund transfers in India. It is your job to monitor all transactions. They provide and develop the structure for all payments, such as LBTR. Everything will be with the help of an IFSC code.

How does the Indian Financial System Code help you?

By using IFSC codes, RBI can easily identify where the funds have been transferred from and where they end up. Also known as the start and end points. It is clear that this makes the process much more efficient, since they can monitor all transactions. The IFSC code also helps to eliminate errors.