What is MICR code? The answer depends on the country where your cheques are issued.
In this article, we’re specifically digging into MICR codes in the Indian financial system.
As we’ll discuss, MICR codes in India are 9-digit numbers that facilitate the clearing of physical cheques.
This is part of our free series on banking in India, covering topics like opening an NRI bank account, which you can access here.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- What Is MICR Code?
- How Do I Find My MICR Code?
- What Is Magnetic Ink Character Recognition Used For?
- Is a Code MICR the Same as a SWIFT Code?
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
What Is MICR Code?
MICR code is what banks use to clear physical cheques in the Indian financial system. MICR code stands for Magnetic Ink Character Recognition code, and it is specifically referring to the code that is found at the bottom left corner of physical cheques.
The MICR code consists of nine digits, which refer to the city, bank, and branch that a cheque originates from. Using high-speed cheque readers, Indian financial institutions are able to quickly process cheques and clear them for payment.
That said, the length, use, and style of MICR does vary depending on which country a cheque originates in. So, if you are looking for information on MICR and MICR technology in a country other than India, you should review relevant sources instead.
Cheque Clearance
In India, MICR codes are specifically used in the process of clearing physical cheques. They identify the city, branch, and bank where a check payment originates from. In conjunction with high-speed cheque-clearing technology, the MICC allow cheques to be processed quickly.
MICR Code vs IFSC Code
The main difference between a MICR code and an IFSC code in India is that a MICR code is used for clearing physical cheques while an IFSC code is used for clearing electronic funds transfers.
Additionally, MICR is 9-digit numerical number while IFSC codes are 11-digit alphanumeric.
Lastly, while a MICR identifies the city, bank, and branch where a cheque originates, the IFSC only identifies the branch where a transfer originates or is being sent to.
What Is the Difference Between a MICR Code Number and an Account Number?
The main difference between an MICR code and an account number is that an MICR code only indicates the specific city, bank, and branch where a cheque originates while an account number indicates the specific account where a transfer or cheque is being sent from.
How Do I Find My MICR Code?
You can find your MICR code in several different locations, including the bottom left-hand corner of your chequebook. Alternatively, you can also find your MICR on a recent account statement or the bank passbook.
Lastly, if you are still unable to find your MICR, you can contact your bank directly or use the branch locator to confirm the number. Importantly, only use official sources when confirming your MICR, otherwise, you could get inaccurate information and delay cheque clearing unnecessarily.
What Is Magnetic Ink Character Recognition Used For?
Magnetic Ink Character Recognition is used to verify the information on the bottom of a physical cheque. As mentioned, while MICR is used in India, it is also used in other parts of the world as well.
In all instances, MICR technology is designed so that it cannot be faked or interfered with. This fraud-proof technology is due to the use of a specific magnetic ink.
There are of course other security mechanisms as well, including specific fonts and various other features, depending on the country where the cheque is issued.
Is a Code MICR the Same as a SWIFT Code?
No, the MICR code and the SWIFT code are not the same. Instead, the MICR is used for clearing physical cheques while the SWIFT is used for sending international transfers to a specific bank.
Frequently Asked Questions
Below are a few of the most common questions we receive from people on this topic. If you have further questions you would like to ask our team, don’t hesitate to get in touch.
What is MICR Code Used For?
The MICR code is used for clearing physical cheques in the Indian banking system. The code is 9-digits and identifies the city, bank, and branch of a specific Indian financial institution that a cheque originates from.
What Is IFSC?
IFSC is an acronym for the Indian Financial System Code. Unlike the MICR, the IFSC is alphanumeric and identifies the specific branch of a bank. Additionally, while the MICR is only used during the physical cheque-clearing process, the IFSC is used for electronic funds transfers. This includes transfers via the National Electronic Funds Transfer (NEFT) system, the Real-Time Gross Settlement (RTGS) system, and the Immediate Payment Service (IMPS) system.
What Is the 9-Digit MICR Code?
The 9-digit MICR code is a sorting code that is used in India during the clearing process of physical cheques. The MICR includes three sets of numbers. These numbers include the city code, the bank code, and the branch code. Each of these numbers has three digits and is presented in order.
Do Banks Use a MICR Code?
Yes, banks use a MICR code in India. More specifically, Indian banks use MICR in order to identify the branches of financial institutions that are involved in cheque payments. This is because MICR stands for Magnetic Ink Character Recognition. This is a 9-digit code that can be sorted and read by high-speed readers during the clearing process of physical cheques.
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