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What is the Difference Between IFSC and MICR Code?

By Staff

In the banking world, IFSC and MICR are common terms used for financial transactions such as transferring money through NEFT, RTGS.


However, there are many who are still confused about the concept and importance of these terms. Let us try to clarify and understand the difference and importance of both the terms.

Find IFSC Code & MICR Codes of All Banks in India

Difference Between IFSC and  MICR Code

MICR Code:

MICR Code, stand for Magnetic Ink Character Recognition. This can be found in all the cheques at the bottom white line which is known as MICR Band. This code can be used for international transactions as well. This is used for enhancing the security in the transactions.

MICR is very old system, used for ensuring the safety and security of negotiable instruments, to facilitate the processing of the cheques.

MICR code contains the details of the cheque such as serial number, the 9 digit number. The first three digits represent the city, next three represent the bank and the last three digits indicates the branch. The code was introduced by RBI to make NEFT (National Electronic Fund Transfer) quick and efficient.


As MICR code is written with a special magnetic ink, thus fraud cases can be easily determined through check done by the magnetic scanner.

A typical MICR code is as: 110229003 wherein the first 3 numbers serve to identify the city code, center three identify the bank code and the last digits its branch code.

110 City Code
229 Bank code
003 Branch Code

IFSC Code:

IFSC code stands for Indian Finance System code. This code identify all the NEFT participating bank branches uniquely.

This code is used by electronic payment system applications such as RTGS ( Real Time Gross Settlement), NEFT (National Electronic Fund Transfer), CFMS (Centralised Funds Management Systems).

To transfer funds, one needs to know the IFSC code, so that the beneficiary gets the funds directly in his account. There is no physical dispatch of cheques between the clearing house and the banks is involved. This unique code system is used for instant transfer of money using internet.

A typical IFSC code is as : HDFC0000351 wherein the first 4 alphabets serve to identify the bank and the last digits its branch which in this case refers to the branch.

Difference IFSC Code and MICR

So, the difference essentially is that IFSC Code is used when remitting money through NEFT and RTGS. On the other hand MICR code is used only on cheque leaves. So, this is largely to with the system of cheques, while IFSC Code is largely to with the NEFT and RTGS system and the same is mentioned on the cheque leaves as well for the sake of convenience. So, it must be noted that both are remarkably difference from each other. The advent of the electronic form of payment has paved the way for greater and greater emphasis on the use of the IFSC Code. Today, you cannot remit amounts to a beneficiary unless you have the IFSC Code, which is of great signficance than ever before. So, make sure that you have it before you send and receive money.

Read more about: banks cheque
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