Benefits of IFSC bank codes

With Internet banking becoming a snowball phenomenon, banks have to increase the accuracy and security of such transactions. One of the ways to do this is by making details, such as the IFSC number of participating banks, a mandatory prerequisite when making these digital transactions.

What is the IFSC Code?

The Indian Financial System Code is a unique 11 character alphanumeric code issued to a bank branch if it facilitates online banking. An IFSC like HDFC0000485 is made up of three parts: the first four alpha characters identify the bank name, the fifth character is a '0' saved as a buffer for future expansion, and the last six characters are those representing the bank branch address and are generally numeric, but can also be alphabetic.

IFSC is used when making funds transfers through electronic means through services such as National Electronics Fund Transfer (NEFT), Real Time Gross Settlement (RTGS) and Immediate Payment Service (IMPS). To successfully complete such a transaction, the payer must have the beneficiary bank's IFS Code.

IFSC Benefits

• Save time and money:

The biggest advantage of online banking over conventional banking is that it saves time. You can skip the traffic, queues, and formalities of conventional banking and simply complete your bank transaction in minutes at your comfort and convenience. IFSC facilitates such online transactions and saves you time. Also, IFSC-enabled online banking helps paperless banking and therefore saves money. This electronic banking is also ecological, in addition to being simpler and faster.

• Shortest transfer time:

IFSC-enabled online banking also saves time, effort, and money, conventional services such as draft demand and bank checks require the transfer of funds to be successful. Additionally, the transaction is reflected in the sender's and beneficiary's accounts immediately, as the details of the IFSC are already confirmed. Also, apart from the bank's service charges (if applicable), no additional money is spent to carry out such a fast transaction.

• Safe and transparent:

For online banking, users must submit key credentials, including the beneficiary's searchbankifsc, which are then verified by the bank. Only after verification of the payer's bank can a user make an IFSC-enabled funds transfer. This makes the process safe. Furthermore, as online banking using IFSC removes the human interference factor from the financial transaction process, such banking becomes more transparent and responsible and reduces the possibility of any type of scam that may be carried out in the system. Furthermore, in online banking, since both the sender's and receiver's account holders are informed of the transaction immediately via SMS or email, such banking is less susceptible to fraud or any loss.

• Help in bank reconciliation:

IFS codes are unique to each participating bank branch, and this is how they help in the reconciliation and validation of bank data. Without IFS codes, the accuracy of electronic transactions will decrease and banks are at risk of inaccurate transactions. Also, since all banks are now digitally enabled, online fund transfers facilitated through IFSC help you to quickly reconcile. Additionally, the IFSC mandate for individual and corporate transactions helps banks to disburse funds quickly and correctly. IFSC also makes it easier for banks to communicate and understand transactions between their branches and also with other banks.