IFSC Code: Meaning, importance & full form of IFSC

The Indian Financial System Code, more commonly known as the IFSC code, serves as a unique code for each branch of a bank. The RBI issues these codes to help them verify the money transfers. Without knowing the IFSC code of your beneficiary's bank account, transferring funds through NEFT or RTGS is impossible.

Now that you know what is IFSC code and the full form of IFSC code, let us understand how it works, and why it is important.

What is an IFSC Number?

An IFSC code is an 11-digit alphanumeric code assigned by the RBI and is unique to every bank branch. This code is required while transferring money to another beneficiary via net banking services like RTGS, NEFT, and IMPS.

This system helps you to transfer your funds to the correct account. Additionally, IFSC helps the RBI keep track of all online transactions.

Importance of the IFSC code

Now that you know what is IFSC, the next step is to understand its importance in the banking industry. Here is why it is important:

• Since the IFSC code is specific to banks or branches, it acts as a branch identifier. You can easily identify your branch and fetch its details using the IFSC code.
• Even a minor error can result in a wrong transaction and loss of your hard-earned money. Thus, the IFSC code ensures that the money transactions are accurate and go only to the intended recipient.
• With the increase in accuracy via the banking identifier, the use of the IFSC code speeds up the transactions, making the process easy and convenient. You can complete online transactions within a few minutes, saving you valuable time.

How does the IFSC code work?

You must have noticed that whenever you attempt to send money through Internet banking services, the bank portal asks for a few mandatory information. This includes the account holder’s name, their account number, IFSC code, etc. If this makes you wonder how IFSC works, this section will answer all such questions.

The IFSC code is created with the primary purpose of locating both the bank branches involved in the transaction. The 11-character code is formatted in a very specific way to ease the identification process.

Once you enter the code with other details and submit your request, the bank identifies the receiver’s bank and branch. The beneficiary’s bank will receive the request and verify the code. Once the verification is complete, the money transfer to the right account is completed.

Features of IFSC code

These are the key features of the IFSC code:

• It is unique to a bank and branch, helping identify the right destination
• It ensures hassle-free fund transfers online
• It acts as a safeguard against unauthorised online transactions
• It helps mitigate banking errors, online banking thefts, and malpractices
• Online banking transactions cannot go through without entering a valid IFSC code

How to find your branch’s IFSC code?

This is one of the most important aspects of understanding the meaning of the IFSC code. You can find your bank or branch’s IFSC code easily on any of the following banking tools:

• Cheque Book Leaves: Your cheque book leaves are the easiest source of finding your IFSC code. You can find it in the top left corner of your cheque leaf, under the address of your branch.
• RBI Website: You can visit the RBI website, where you can input your bank and branch name and search for its IFSC code.
• Bank Website: You can easily check your Axis branch’s details by accessing our branch locator tab. You can search for branch details by adding information about your locality.

Ways of transferring money using the IFSC code

This code is required to facilitate three major types of online transactions:

• National Electronic Fund Transfer (NEFT): This is a safe and hassle-free online banking tool which requires the beneficiary’s account number, name, bank or branch name, and its IFSC. Sometimes IFSC code is also referred to as the NEFT code.
• Real-Time Gross Settlement (RTGS): This method is widely used to transfer money instantly once the transaction request is initiated. This also requires an IFSC to speed up the processing. People may refer to IFSC as an RTGS code while making RTGS transactions.
• Immediate Payment Service (IMPS): This is also a real-time money transfer method, which is used to transfer money instantly. It is available 24/7 and requires an IFSC code to process the transaction.

Key differences between IFSC, MICR and SWIFT Codes

IFSC, MICR and SWIFT codes can be considered bank location codes or bank routing codes to ensure a secure transaction process, but they differ in certain aspects.

Also Read: Significance of UTR number in financial transactions

When will I need my IFSC code?

• You’ll need your IFSC code in various banking situations, such as making online money transfers via NEFT, RTGS or IMPS.
• It is also required when receiving funds from others, especially if the transfer is happening between different banks.
• Your IFSC code is crucial when setting up automatic payments or when you're filling out bank forms for tasks like opening a new account, applying for a loan or linking your bank account to various financial services. This unique code ensures that your funds are accurately routed to the correct branch.

Frequently Asked Questions (FAQ)

What is an example of the IFSC code?

The IFSC code for Axis Bank, Dadar- Mumbai Branch is UTIB0000124.

How is IFSC code written?

The first 4 characters of the code represent the bank’s name, the fifth character is always 0, and the last 6 characters are the code of the branch. Since Axis Bank was originally called UTI Bank, the first four characters of Axis Bank’s IFSC code is UTIB.

Are there other types of IFSC codes in India?

No, the IFSC code is unique to all banks and is allocated by the RBI.

As we move forward in the transition of Citi's consumer business in India to Axis Bank, you may be aware of the change in the IFSC of your account. While your Citibank IFSC will also be valid until migration (expected to be completed by the middle of 2024), we urge you to start using your new Axis Bank IFSC now. Read on to know more about the importance of IFSC and why you need to start using the new Axis Bank IFSC.

For further information regarding payments linked to your Citi credit card or account, click here.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.