IFSC meaning in the world of Indian banking is “Indian Financial System Code”.
In this article, we’re going to be explaining exactly what this code is for and when you’ll need to use it.
This article is part of our free series on banking in Asia, ranging from opening a corporate bank account in Singapore to banking regulations in Thailand.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- IFSC Meaning
- How to Find the Indian Financial System Code
- IFSC vs SWIFT Code
- Frequently Asked Questions
- Do You Want Help Opening Accounts?
IFSC Meaning
IFSC meaning the Indian Financial System Code (IFSC) is an alphanumeric code that differentiates between different financial institutions and their branches. More specifically, it is a code that is used to identify banks that participate in the National Electronic Funds Transfer (NEFT) network, also known as online transfers.
The IFSC code operates very similarly to codes that identify specific banks and branch locations in other countries For example, in the United States, banks are identified through their unique Routing Number. In Canada, banks are identified through a combination of two numbers, the Transit Number and the Institution Number. On the other hand, UK banks (and many other countries) use a Bank Sort Code.
Importantly, regardless of the country in question, the IFSC code and its international counterparts are used to identify the specific branch location for a transaction.
In other words, when using an IFSC number, Routing Number, Sort Code, or Transit and Institution number, sending parties can be sure that the transfer will land at the desired branch and in the correct account.
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How to Find the Indian Financial System Code (IFSC)
You can find the Indian Financial System Code (IFSC) in several locations, including on your bank documents, online, and from several private websites.
First, documents such as your bank chequebook and account passbook will have the IFSC for your bank and branch.
Likewise, your bank’s website and the Reserve Bank of India (RBI) website will have your branch’s IFSC listed.
Lastly, there are several private websites that allow you to quickly search for the relevant IFSC, however, you will need to have all of the relevant account information available.
Is IFSC Code Needed to Transfer Money?
Yes, the IFSC code is needed to transfer money if you are sending transfers through common methods, including National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS) payments. This is because the IFSC ensures that transfers reach their intended destination and do not ultimately get lost in transit.
Is IFSC Code Only For India?
Yes, the IFSC code is only for Indian financial institutions. As mentioned, other countries have their own form of bank and branch identification code. This ranges from the United States to China and every country in between. The purpose of these codes is to ensure that transfers are sent securely from the sending account to the intended recipient.
IFSC vs SWIFT Code
The main difference between the IFSC code and the SWIFT code is that IFSC is used for sending and receiving domestic transfers within the Indian banking system while SWIFT is used for sending and receiving transfers between banks internationally. In other words, IFSC and SWIFT both ensure that transfers arrive in the correct account, but they are used differently by sending and receiving parties, depending on the jurisdictions they are located in.
Frequently Asked Questions
Below are three of the most common questions that we receive from people looking into the meaning of IFSC. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Why Is an IFSC Code Required?
An IFSC code is required when sending transactions because it ensures that transfers from one party are correctly attributed to another. This is because an IFSC code is a unique identifier that reflects a single branch of a single financial institution. In addition to being unique to each branch, it is also required when sending transfers between Indian banks using standard transfer methods like NEFT and RTGS transfers.
Is IFSC Code Unique?
IFSC code is unique to each branch of every bank in India. However, all customers at a single branch will share the same code. In other words, IFSC is unique to the branch of the bank but it is not unique to the customers that hold accounts at the bank. Instead, the customers will all use the same IFSC code anytime that they are sending and receiving transfers.
Do all Banks Have the Same IFSC Code?
No, all banks do not have the same IFSC code. Instead, each IFSC code will be unique to a specific branch of a specific bank. Not surprisingly, it’s important to confirm your IFSC code prior to requesting or receiving transfers. This is because the IFSC code ensures you receive the transfer into your account. Likewise, if you are planning on sending transfers, you will need to confirm the IFSC code of the receiving branch. Otherwise, your transaction could get lost or severely delayed.
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