IFSC Full Form in Banking
09 January, 2024
Thanks to online fund transfer systems like National Electronic Fund Transfer (NEFT), Real-Time Gross Settlement (RTGS), or Immediate Payment Service (IMPS), you can send money to another bank account almost immediately. To transfer money to another bank account, you need the beneficiary’s bank details. One such piece of information is the IFSC. The full form of IFSC is Indian Financial System Code. Keep reading on to know more.
NEFT IFSC Code
Each bank that participates in the NEFT system is assigned an 11-digit IFSC for every branch. The first 4 characters of IFSC are alphabets and represent the bank; for example, the IFSC of HDFC Bank will begin with ‘HDFC.’ The fifth character following the bank’s representation is a ‘0,’ which is followed by the branch’s unique 6-digit code.
For example, the IFSC of the HDFC Bank in Digboi, Assam is ‘HDFC0001980.’
The IFSC of a branch is of extreme importance in banking as it is used by the NEFT system to identify the bank and branch of the destination or origin of the money transfer.
The NEFT system allows you to transfer money to another bank account online, with no cap on the upper and lower fund transfer limit. The payments are settled in half-hourly batches.
Importance of IFSC in RTGS and IMPS Transfers
RTGS stands for Real Time Gross Settlement, which enables individuals to transfer money greater than ₹2 lakh. This system is a continuous and real-time settlement of money transfers on a transaction-by-transaction basis. The RBI has not set any upper limit on RTGS transactions and transaction charges have also been capped.
The IMPS or Immediate Payment Service is another payment system that is developed by the National Payments Corporation of India (NPCI) that allows round-the-clock transfers all throughout the year. It offers instant interbank fund transfer service electronically that is suitable for person to person, person to merchant, and person to account transfers.
For RTGS transfers, beneficiary details including IFSC are required. In case of IMPS, you have the option to transfer money to an account or using the beneficiary’s mobile number. If you opt for the former, you must provide the beneficiary account’s IFSC.
What is the need for NEFT IFSC Code?
Although different payment system work on different parameters, they all require IFSC of a bank branch for identification. The single identification code of a bank branch remains constant for all transactions, making it easier to trace each transaction and check its status.
For example, if you want to send funds through the NEFT system, you will require the following details of the receiver:
Name
Account number
Bank name
Account type
IFSC
Additionally, the IFSC of the receiver and sender in addition to amount and date of the transaction, among other things, are essential in tracking the status of an NEFT transaction.
IFSC & International Money Transfers
Note that IFSC is used to identify banks in India. IFSC plays an important role when making domestic fund transfers. However, when it comes to overseas fund transfers, IFSC is not required. Instead, you would need a Society for Worldwide Interbank Financial Telecommunications (SWIFT).
How to Find the IFSC Code
You can get access to a bank branch’s IFSC by browsing the official database of RBI. The cheque book of each bank also consists of its IFSC, Magnetic Ink Character Recognition (MICR), etc.
Each participating bank in the NEFT system has a list of IFSC of different branches on their website; you can find the IFSC of any HDFC Bank branch by visiting this page.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.