MICR vs IFSC Code: What's the Difference?

MICR vs IFSC Code: What's the Difference?

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We welcome you to this article of Jeevan Bima Bazaar! In today's article, we will know what is the difference between MICR code and IFSC code? So get ready to receive this important information.

MICR code and IFSC code are very important terms in the banking world. When we carry out financial transactions or various banking deals, we need MICR code and IFSC code.

We have learned in detail in our previous article that what is MICR code and IFSC code? So now without any delay let us understand what is the difference between MICR code and IFSC code?

Difference Between MICR Code and IFSC Code

Both MICR code (Magnetic Ink Character Recognition) and IFSC code (Indian Financial System Code) are used by Indian banks and financial institutions. But both these codes serve different purposes. Now we will know the Difference between MICR and IFSC code:

Objective:

MICR Code: MICR code is mainly used for processing and identification of cheques. It enables efficient and accurate processing of checks using magnetic ink and special characters that can be read by MICR readers.

IFSC Code: IFSC Code is used for Electronic Fund Transfer Systems like NEFT, RTGS and IMPS. It helps in identifying specific bank branches and ensures correct routing of funds during online transactions.

Use:

MICR Code: The MICR code is printed at the bottom of the check issued by the banks. It contains information about the bank branch, bank code and account number.

IFSC Code: IFSC code is used while initiating online transactions, including fund transfers, bill payments and adding beneficiaries. This is entered along with other details to ensure that the money is sent correctly to the desired bank branch.

Structure:

MICR Code: The MICR code consists of nine digits. The first three digits represent the city code, the next three digits represent the bank code, and the last three digits represent the branch code.

IFSC Code: IFSC code consists of 11 characters. The first four characters represent the bank code, the fifth character is usually a zero, and the last six characters represent the branch code.

Channel:

MICR code: The MICR code is printed using special ink which has magnetic properties. It is readable by MICR readers and requires physical documents like cheques.

IFSC Code: IFSC code is used in electronic transactions and online banking. It is to be entered manually or selected from the dropdown menu while transacting through Internet Banking or Mobile Banking.

In short, MICR codes are used to check checks and ensure their accuracy during processing, while IFSC codes are used for electronic fund transfers and online banking transactions to correctly identify specific bank branches and route funds.

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