Due to the evolution of the digitalization, the statistics of the number of online money transfer from one account to another account has elevated drastically. This led to more and more usage of the online transactions and transfers. The demand and the popularity of the online money transfers stem as a matter of fact that they are hassle free and convenient as well as instant and cheap. You don't have to travel anywhere just a few details and finger clicks and you're done. But, have you ever noticed that while making online transfers from one account to another, there's a certain code that the Bank asks for- called as the IFSC codes. The IFSC codes are nothing but a key- bit information that is used during the online money transfer. Very few must be knowing about what exactly an IFSC Codes means? What the role and importance of it? In this article, we are going the know about the hidden truth about the IFSC codes and its materiality.

IFSC Codes: What are they?

The IFS codes stand for Indian Financial System Code.  This code was launched by the Reserve Bank of India keeping in mind that the payments and the transfers online must be safe and secure. Because, it is very much necessary to identify the bank and the branch where the beneficiary account is held, therefore, the IFSC codes came to space. This is why the IFSC codes are a mandatory, for different bank transfers. The code, identifies each and every bank branch participating. The IFS codes follow two payment and settlement systems in India. They are:

Pattern/Format Of The IFSC Codes:

The IFS codes are basically the alphanumeric key bit code. It consists of an 11 character code structure that is unique in its own way keeping in mind, that the banking institution and the branch where the beneficiary account is held. The first four characters denote the bank name, and the last six characters represent the branch of the bank. The fifth character is usually a zero, which is conserved up for the future use. The code of every branch is cited on the cheques of the account holder. Lets take an Example Let us consider an SBI branch IFSC code. The format of the SBI IFSC code is somewhat like, But, still, there must be a little confusion playing inside your head like, there are so many SBI banks itself in the same place, consider Delhi, Rajouri Garden. The Rajouri Garden itself has 2-3 branches of SBI, so how will we recognize the IFSC codes for the different branches??? Well, that's not a big issue. There are some banks which have more than one branch in the same city, in that situation which differs from one branch to another branch by using different last seven digits of IFSC. It is also known as the Bank Branch Locator. Let us assume, the SBI branch of the Rajouri Garden, it has two branches located at same area but still, they differ, it is the cause of the different IFSC digit codes. Like one branch of the SBI has an IFSC code of  "SBIN0007911" whereas, the other branch has the IFSC code as "SBIN0007000". We observe that there is a change in the last seven digit number to differentiate the branch.

What is the Role of the IFSC codes?

The IFSC Codes plays a very vital role when transferring money from one account to another through various modes such as: All these options are fundamentally connected with the inter bank money transfer but they all perform the task in a different way. The common chain between these varied options is the bank IFSC Codes system.

NEFT

It is also called as the National Electronic Funds Transfer (NEFT). It is widely used nation wide to transfer money from any bank branch to any other bank branch.

Working Schema Of NEFT

The Processing and the Service Charges of the NEFT

NEFT offers certain processing and service charges for each particular batch of  transactions. Every Bank decides their charges and charges differ from Bank to Bank. For inward transactions at the destination banks (credit to the beneficiary's account), there is no charge levied on the beneficiaries. For Example, NEFT Charges for SBI for the outward transactions to the originating banks – charges are applied to the remitter The charges applicable for funds transfer from India to Nepal have a different charge scheme. The concessional charges to transfer funds under this scheme:

RTGS (Real Time Gross Settlement)

The RTGS stands for the Real Time Gross Settlement. This is basically a fund transfer system where the funds are transferred from one bank to another bank in "real time" and on a gross basis. The term Gross settlement means that the transaction is done on one on one basis without merging or bunching with any other transaction. Once the payment is processed, the payment is considered as final and immutable.

Features of the RTGS (Real Time Gross Settlement)

The RTGS has some specific features which stand out in every factor.

Working Schema of the RTGS

Processing and Service Charges For RTGS

The processing and service charges may vary from bank to bank. Following are the normal fees payable per transaction: The inward transactions are free in case of the RTGS. For outward transactions:

Details Required For the RTGS Transactions

IMPS (Instant Money Payment System)

Also known as the Immediate Payment Service. For a mobile obsessed country like India, this mode of fund transfer system is just like an icing on the cake. As the IMPS offers a 24*7 facility for online funds transfer and anyone can transfer money anywhere without wasting their time standing in the queue to wait till their turn come in the bank. The IMPS was launched by the National Payment Corporation of India (NPCI). So, from now on, we don't have to worry even if we forget to bring our ATM card, your mobile phone saves your life, provided that it should be linked to the registered bank account.

Features of the IMPS

IMPS offers a 24 hrs facility of transferring money from one account to another anytime and anywhere whether he/she uses a low-cost device or a high-end smartphone device. For using an IMPS service, the user must know the mobile number of the payee which is registered or linked with the bank, the seven digit MMID(mobile money identifier), and the sender's four digit pin. IMPS can be used in three ways: There are a lot of benefits which you can achieve through IMPS like,  you can pay your grocery bills through your mobile phones, but you need to make sure that both the money sender and the receiver must be linked and registered in IMPS. You can make most of the payments using your mobile phone rather than using the ATM cards.

Where can you use IMPS??

IMPS can be used anywhere any device starting from the low-cost mobile phones to the latest android and other smart phones. You can select the IMPS method as per your phone compatibility. The users can also use through net banking: There are about 68 banks that are linked and registered themselves under IMPS. The prepaid payment providers such as Oxigen, m-Pesa, Airtel money, m-Rupee, UAE-exchange etc allow to send and receive money using your mobile phone. You don't require a bank account for this. For SMS based IMPS transactions, there a certain limit of Rs 5000 per day per account. For mobile based apps it is Rs 50,000.

How To Use An IMPS (Step-by-Step) Procedure

Using MMID

1. Registration Process for the Sender Firstly, register yourself for mobile banking service facility at your bank branch.
  1. Get the mobile money identifier (MMID) and MPIN from the bank.
  2. After generating the MMID and MPIN, download the software or the required app for the mobile banking. (you need to make sure that the app is compatible with your phone) otherwise, you can go for the SMS facility.
2. Registration Process for the Receiver Link the mobile number to the bank account. Get the MMID from the bank. For the Sender(Remitter)
  1. Login to the application select the IMPS menu, if not you can also choose the SMS option even in your mobile.
  2. Enter the beneficiary(Sender) mobile number, MMID number, the amount and your IMPS pin which consists One Time Pin and the last three digits of the M-PIN. SEND
An example, of the IMPS transfer SMS, is shown below NOTE To Receive Money: To receive money from the sender you need to perform the following steps:

IMPS using Aadhaar Card

Aadhar card linking to your bank account? Strange right? Rewind 7 years back, when we were registering ourselves for aadhar card the person who was generating our information for Aadhaar card took the biometric fingerprint image as well the iris image. Do you know why? It is because these are one of the most unique features of our body. No two person on earth can have the same iris image and fingerprint. Thus, keeping  that in mind the NPCI introduced a new feature of linking your bank account with the aadhar card. This is a new way of receiving money from the bank account.You don’t have to use your Debit card, or your signature. You don’t have to stand in a queue for a long time in the Bank branch and visit the bank again and again. Just the aadhar card with you and you are good to go. It uses the Aadhaar card for the authentication purpose. Like, UPI and USSD this is another initiative by the NPCI.

IMPS using IFSC

99% of the banks nowadays, are using the IMPS using the IFSC technique. It is  the smart approach towards the advancement of technology. It is quick as well as safe and secure. Its 24*7 availability has made it more convenient to use. During Sundays, also you can avail this facility without any problem.You need to have an imobile facility for performing any sorts of payments and transfers. Imobile- is the  internet banking facility that is provided by each and every bank, to the customers to stay connected with their bank account anytime without any hassle. One must have the internet facility to use this. The user can check his or her, account balance, account history as well as can transfer and deposit the cash to the other person of the same bank otherwise from a different bank also.

Methods Of Transferring Money Using IFSC: [Step by Step Process]

You can perform this banking facility either through the desired Bank App otherwise visit the official website of the bank where you have the account. This method is one of the quickest ways for transferring and depositing cash. You need to make sure that you are connected to a fast Internet service.

Aadhaar Enabled Payment System

Aadhaar card number- the 12-digit number mentioned on your aadhaar card. Bank IIN number or name.- its a six digit unique identification number that is given or issued to each and every bank. The IIN number represents the bank name. Fingerprint- the customer’s fingerprint as it denotes the uniqueness of each person. (Fingerprints do not match ) You can perform the following types of banking transactions: Balance inquiry- You can enquire about amount of balance in your account. You need to give your authenticated fingerprint scanned to the machine which links up your account and aadhar card and gives you out the information of your balance of your account. Cash withdrawal- Using your fingerprint, you can also withdraw the desired amount of cash. Cash depositing- With the help of both IIN and fingerprint you can deposit cash instantly. Aadhar to Aadhaar Transfer.-Its just the same as that of using Paytm, instead of a Paytm (phone number) we are using Aadhaar card. The funds are transferred from aadhaar to aadhar. [Note- you need to make sure that both the person must have the aadhaar linked to their bank account] For doing the aadhaar transactions you need to remember your  12 digit aadhaar number, and you are good to go.

Advantages of using IMPS using Aadhaar Card [AEPS]

Through AEPS, we can perform both financial and non-financial transactions- financial transactions are those type of transactions which involves money and payment, like depositing money in the bank account, purchasing goods and buying properties etc. Whereas,  the non-financial transactions means those type of transactions which do not involve the financial issues. They do not involve in the transfer of online funds. ex- change in personal details such as name, address or change in the bank details.

How AEPS Works

The NPCI has launched this new technique AEPS, which facilitates the depositing and borrowing of the money a way more easier and faster just using your Aadhaar card details.

Charges For the AEPS

The charges for the AEPS, can go up to Rs15 per transaction. For AEPS, three institutions are involved and these charges fees. AEPS, might turn out to be a little expensive than the UPI and USSD, but it has helped a lot of  people who are living in the rural places, or for those who are illiterate. It has created a lot a convenience for those type of people. It’s like bring the bank to your door step, no need of wasting time and money traveling and searching for ATMs and Banks. That is why the Government calls, the AEPS as the “Micro ATM”

Tips To Ensure The Correct Usage Of IFSC Codes