When you are sending money, you want to ensuring that your funds reach the intended bank. Transferring funds to the wrong bank can cause multiple problems, the transaction cannot be automatically reversed. You would have to contact your bank, discuss what happened and potentially wait an extended period of time for your money back. If you even get it back, that is. A huge inconvenience.
Sending funds to the wrong bank can be easily done, whether you supply the wrong details for whatever reason, or maybe the banker is to blame. The point is, it can easily happen.
This is where the IFSC-code comes into play.
What is an IFSC Code?
IFSC Code, is also known as Indian Financial System Code. An IFSC code consists of 11 characters. Usually, the first 4 characters identify banks name. The fifth character is 0. The last 6 characters identify the branch of the bank. All of the payment processes including RTGS, CFMS and NEFT utilise these codes.
Why is Indian Financial System Code needed?
Traditionally, transferring funds was done off of the internet. Face to face with a banker. You would detail how much money you want to transfer and to what destination bank account. With today’s technology, there has been a massive shift to online transactions and it is the new trend.
To make a financial transaction online you no longer need to be face to face with a banker. You just need to know where the money is coming from, and where it is going to. As well as the details of both respective banks. Details such as IFSC codes.
What are the benefits of Indian Financial System Code?
There are numerous benefits of using an IFSC code. To keep it short, here’s a summary:
Now you no longer have to go down to your local branch, stand in a queue for an extended period of time, just to process small money transfers. With the Indian Financial System Code, it no longer matters where you are. You can make the transaction anywhere in the world.
Money can now be transferred in a matter of minutes. Making the whole process much more efficient. This is very helpful when you need to transfer money quick in an emergency.
Each branch and their respective banks will have this unique IFSC-code. This makes the process more safe and secure. Every transaction using IFSC codes will have a start and an end point. Ensuring funds are easily tracked.
Unlike at your local branch, you can access your bank account online at any time, on any day.
You can pay your bills, check your balance, and transfer funds all thanks to the Indian Financial System Codes. Fast and efficient.
Who controls fund transfers?
The Reserve Bank of India, or RBI. Established as the central banking institution, controls all of the fund transfers in India. It is their job to oversee all of the transactions. They provide and develop the structure for all payments, such as RTGS. All will the help of an IFSC code.
How does the Indian Financial System Code help them?
By using the IFSC codes, RBI can easily identify where funds have been transferred from, and were they end up. Also allowing them to block such transactions. It’s a very quick and simple way to know where funds have been.
Another great benefit is that IFSC codes allows for a more secure way of sending funds. Because of the coding, it becomes very hard for a hacker to spoof and send funds. They will know it will be a scammer trying to scam you, and blocked it.
Why is Indian Financial System Code required?
As stated earlier, fraud is on the rise. Attacks are becoming more specific and targeted. And to cover up the tracks, attackers are actually making it harder to hack. Allowing the transactions to go through unnoticed. This can be very detrimental for your business.
Also, you must know how to use the IFSC code. Sending funds will require you to enter this code on your website. If you don’t want to get fined, then you shouldn’t enter this code. But, if you have to do this for some specific reason, then the code is there waiting for you. Entering this code ensures that funds reach the correct people as intended. It’s a very easy process and a great way to start building new business relationships online.
Watch out for these scams. They come in many forms and they can appear very convincing. If you receive an email that looks like it is from your bank or any other company that you do business with, chances are, they’ve already taken you for a ride. Yes, they will try to make you a customer for life, but in the end, you still have to pay for the service.