Banking Goes Online
Years of innovation have finally paid off as banking worldwide has finally reached a point when cashless transactions have become the norm. With inventions like e-wallets, credit cards, mobile banking, net banking, electronic fund transfer and more, carrying cash has become passé. Cashless banking has created nothing but an all-round win-win situation for everyone involved. We save on time, otherwise spent on making trips to the bank; the risk factor has been drastically reduced as money is not changing hands physically but electronically and not to forget, the trees all around are thanking us for going online as well.
IFSC
From the spectrum of banking services which have gone online, fund transfer is probably one of the most crucial banking services which people stand to benefit from. In India, where financial crimes are rampant, online fund transfer may be considered as a beacon of hope to bring down the risk factor surrounding monetary transactions. The credit for revolutionizing the process of online fund transfer in India lies with the Reserve Bank of India, which has introduced the IFSC (Indian Financial System Code) to the NEFT (National Electronic fund Transfer) and the RTGS (Real Time Gross Settlement) systems of electronic fund transfer.
About IFSC
The IFSC (Indian Financial System Code) is an 11-digit alphanumeric code which is issued by the RBI to all banks who are under the NEFT (National Electronic Fund Transfer) and RTGS (Real Time Gross Settlement) network. Serving a crucial role in the electronic payment system, the IFSC code comprises of 3 parts. First four characters stand for the bank name, the fifth character is always zero and the remaining 6 characters represent the branch address. For instance, let us take the example of the Yes Bank Dwarka branch IFSC code which is YESB0000263. In this 11-digit code, the first 4 characters - ‘YESB’ – stand for Yes Bank, the fifth character is 0 and the remaining 6 characters ‘000263’ give the location of the mentioned Yes Bank branch which is located in Dwarka, New Delhi.
Why IFSC is Crucial to Indian Banking
In the Indian banking system, the IFSC code holds a unique position for several reasons.
- Helps Identify Source and Destination Banks
Each bank participating in the NEFT and RTGS network is issued a unique IFSC code which
helps identify source and destination banks in the event of a fund transfer.
- Saves Time
With the help if the IFSC code, money can be transferred from one bank branch to the
other, all the way across states in a matter of a few hours.
- Regulate Monetary Transactions
Since the IFSC code identifies source and destination banks in an NEFT / RTGS fund
transfer, it is easier to regulate the authenticity of transactions in case a discrepancy
arises.
- Eco-friendly Method Of Transferring Funds
