What is an IFSC Code and Why Does Every Bank Use It?
19 September, 2024
- ✔️bank
- ✔️finance
- ✔️public sector
An IFSC code is an essential part of online banking in India, used by every bank to facilitate digital fund transfers. This 11-character code is unique to each bank branch, allowing systems like NEFT, RTGS, and IMPS to route transactions to the correct bank location. For example, if you’re transferring money from your SBI account in Delhi to a Bank of Baroda account in Chennai, the IFSC code ensures that the money is sent to the exact branch of Bank of Baroda in Chennai.
One common question users have is, why is the IFSC code necessary when UPI exists? While UPI is widely used for small, instant payments, IFSC codes are essential for larger, more secure transactions like NEFT and RTGS, which businesses and institutions often use. Entering the wrong IFSC code can result in transaction delays or errors, making this code crucial for seamless and error-free money transfers across banks. Therefore, knowing and using the correct IFSC code is vital for both personal and business banking in India.