When you send money, you want to make sure that your funds get to 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 potentially wait an extended period of time to get your money back. If you even get it back, that's it. A major drawback.
Sending funds to the wrong bank can easily be done, whether you provide the wrong details for any reason, or perhaps the culprit is the banker. The point is that it can easily happen.
This is where the IFSC code comes in.
What is an IFSC code?
The IFSC Code, is also known as the 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.
Traditionally, funds were transferred off the Internet. Face to face with a banker. It would detail how much money you want to transfer and to which destination bank account. With current technology, there has been a massive shift to online transactions and it is the new trend.
To complete an online financial transaction, you no longer need 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 details of both respective banks. Details like IFSC codes.
What are the benefits of the Indian Financial System Code?
There are numerous benefits of using an IFSC code. For short, here is a summary:
They allow online financial transactions.
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 process of transferring funds.
Money can now be transferred in minutes. Making the whole process much more efficient. This is very useful when you need to quickly transfer money in an emergency.
Limit possible fraud.
Each branch and their respective banks will have this unique IFSC code. This makes the process more secure and protected. Every transaction that uses ifsc code will have a start point and an end point. Ensure that funds are easily tracked.
Open 24/7.
Unlike 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 Indian Financial System Codes. Fast and efficient.
Who controls the transfers 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 RTGS. All will have the help of an IFSC code.
How does the Indian Financial System Code help you?
Using IFSC codes, RBI can easily identify where funds have been transferred and where they end. Also known as the start and end points. Clearly this makes the process much more efficient as they can monitor all transactions. IFSC code also helps eliminate errors.
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