India has emerged as a financial focus from global investment viewpoint. People from all parts of the world have been investing in India for better results and growth opportunities. Banks and financial institutions keep on getting better investment opportunities from the investors which is making India a better financial hub for all. The Indian banking system works on some parameters which help you to make funds transfer from one account to the other. One method of transferring funds is the NEFT which is known as National Electronic Funds Transfer which uses the bank details to transfer funds. These details are the general account details including one important detail known as IFSC Code-this is an abbreviation for Indian Financial System Code. This is a unique identifier with an 11-digit serial number which is both alpha numeric in nature. This number is allotted to each bank based on their branches by the RBI. Let us look at how it is created and how to identify if it is accurate.
Reserve Bank of India which is better known as RBI, and it follows certain norms which help you to control any frauds or wrong transactions to be stopped from processing. Therefore, it has come up with IFSC as a check point where you cannot go ahead to transfer funds if you do not know the bank details. It governs the Indian state banks and Union territories so that the financial transactions can be monitored well.
Finding IFSC is an easy task so that the payment can be transferred on time and without any hassles. The IFSC is printed on the cheque leaves booklet provided by the banks at the opening of the account in the specified bank. This is the easiest way to know all your bank details including the IFSC. You can send and receive the payments using this unique code and it is also helpful make an RTGS transfer.
This is nothing but a Real Time Gross Settlement transfer done from one bank to any other bank account. If you do not find such code on the bank cheque book, then you need to call the customer care of that particular bank and for this vital information. As the data is sensitive and should not be in the wrong hands, you might be asked for some authentication questions, before the executive proceeds to give you the needed information. The other method to know such details is using the online mode.
As we all use the internet for most of the work, we can also find the IFSC online. Here you may get details such as Bank name, branch address, account number, and many other details. But if you wish to know the IFSC without login into your bank account, you may find it on search browsers too. This is the best way to know about your IFSC and make fund transfers.
There are many types of payments that can be done using the IFSC. The most common ones in the banking system are the NEFT and RTGS funds transfer.
NEFT: This transfer is known to be the safest of all and takes about 24 to 48 hours to reflect the funds transfer in the other account holder’s account. The limit for such transfer is not set and you can do any amount of transactions from your account. All you need to check is the charges that can be levied by the banks upon such transfer.
RTGS: This is the easiest and fastest method to make a payment using the wire banking. Payments reach the bank account within 2 hours of the banking hours. You can transfer the funds for a minimum of 1 lacs and the payments are on gross basis only. Here the charges may not be levied as the transfer is for a high value amount.
The only thing you need to remember is that such transfers are used for interbank transfers within India and not outside the country. For any transaction outside the country, you need to use the BIC and SWIFT code for a smooth and successful transaction.
It is a mandate to have an IFSC code in all the banks. But there are a few banks that are small in its operation and do not have an IFSC for its branch. This IFSC is given by the RBI and not the bank, RBI governs the entire banking system in India and its union territories. If a bank is not given an IFSC then you would not be able to transfer funds into that account or even from that account.
It is necessary to get the IFSC for all NEFT and RTGS transactions. So, ensure that you have your bank account in a bank which has such facility like the IFSC available with them. The world has changed into a digital platform and you should be well versed with all the transactions that happen online. It can be possible that you may need to transfer funds on an urgent basis and have no resort available to do so. This is a life saver for you and the person who is expecting the money would also get it as fast possible. In fact, banks have an IFSC for credit cards as well. This helps the users to make the payments for all their card bills using this IFSC and that too is reflected within the stipulated period. It gives the users the speed and accuracy to get their bills paid as soon as possible so that the credit funds are released, and they can swipe more on regular basis.
IFSC helps the banks to authenticate the account in which the transaction is about to happen so that there is less chance of fraud or wrong transaction to happen. The funds that are transferred via NEFT and RTGS is not refundable or reversible and hence, the details entered should be accurate. This would mean that you do not have the option to get the funds back and you would bear a loss if the details mentioned are not correct. IFSC is a great way to make all your payments online without moving out of the house or office and it gets reflected the same day into the other person’s account. Previously cheques were used to make all such payments, which would take almost 3 days to reflect in the account. But with the NEFT and RTGS using the IFSC has made it a paperless activity and smoothened the process as well.
Q. What is an IFSC?
A. IFSC is a unique code which helps the individuals to transfer funds from one account to other account in fraction of seconds using the wire transfer. This code is a unique 11-character code which depicts the bank account and branch name to help the transfer happen successfully.
Q. How do I find the IFSC for a bank branch?
A. It is very easy to find an IFSC for any bank branch. You can do so by using the cheque book provided by the bank or you can use the online method. All you need to do is go online and open the website that offers such details. Now enter the bank name with the state and city code along with the branch address. This would give you the exact IFSC code for transaction.
Q. Why do you need IFSC for NEFT?
A. An NEFT transaction is done using the bank IFSC code to make the transaction unique and safe. You need to make a fund transfer electronically by filling up the bank details along with the IFSC so that your account can be verified, and the transfer can be made. These transactions are like e-checks which get cleared in batches and the money is transferred into your bank account.
Q. Can anyone transfer funds using IFSC?
A. Yes, you can transfer funds using the IFSC code whenever you require. If you have a valid and active bank account and funds to make the transfer, you can make the NEFT payment using the IFSC.
Q. What is the Benefit of NEFT via IFSC?
A. NEFT transactions are considered secure and can be done at any time. It can be reflected in the bank account within the given timeframe and needs no physical cheque or demand draft to process the transaction. You need not visit the bank branch for any document submission. The person can be informed about the transaction confirmation by email or text message. This is a paperless environment friendly method and can be a cost-effective way to do so.
Q. Do we have NEFT charges to be paid?
A. The bank charges fees on specific transactions if it is from a different bank or an individual who has a different account. It depends on the amount that is transferred. There is a slab which helps to know how much charge you would need to pay and would be deducted on the account.
Q. How many times does the NEFT transfer run?
A. NEFT transfers run in each hour from Monday to Friday in 12 settlements from 8 am to 7 pm and on Saturdays it runs six settlements from 8 am to 1 pm.
Q. How does IFSC help in transfer?
A. IFSC helps to transfer the amount from one bank to another and by identifying the bank details entered and makes it authentic. It is the safest and fastest way to transfer the money from one account to another.
Q. How does RTGS work for IFSC?
A. RTGS is a Real Time gross Settlement process which settles in the same time when they are initiated. The turnaround time is 2 hours from the time it has been initiated. This is good for high value settlements so that it does not take much time to reflect. Also, it is a paperless work and can be done from anywhere. It helps to reduce the risk of money being sent to wrong hands. IFSC helps to identify the right account. If the account has a wrong IFSC code, it would not transfer the funds unless corrected.
Q. What is the difference in RTGS and NEFT?
A. The basic difference in RTGS and NEFT is that NEFT is settled in batches and on hourly basis whereas RTGS works at the same time it has been initiated. NEFT has a Deferred Net Settlement system which helps in funds transfer.
Q. Is RTGS a fast mode for payments?
A. RTGS is the fastest mode of payment from bank to bank. It does not take any time to reflect the transaction. In fact, it is done the same moment the transfer is done. In case of any issues technically, the transaction can be delayed by around 2 hours at the maximum.
Q. Is there a charge for RTGS fund transfer?
A. RTGS fund transfer is free to receive in any account. However, when sending the funds using RTGS you are charged a fee which is deducted from your account. This is divided in slabs such as up to 5 lakhs you will be charged 30 INR per transaction and for more than 5 lakhs you would be charged 55 INR per transaction.
Q. Can a transfer be done using an incorrect IFSC?
A. If the IFSC is wrong, then you would not be able to make the transfer valid. Therefore, you should be sure of the IFSC code when you plan to make a payment. If the code is wrong, then you can find the right one online and make the payment once you register the account as a beneficiary.
Q. Do I get a notification for transfers?
A. Yes, you would get a notification as and when the transfer is complete using the SMS or email method as chosen while you make the transfer.