Emerging Trends in Banking & Technology Prof. C.K.Sreedharan Unit No:3B

IFSC IFSC stands for Indian Financial System Code. The Payment System Applications such as Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT) and Centralized Funds Management System (CFMS) developed by the Reserve Bank of India use these codes.

Specimen copy of a cheque leaf Date: Pay or bearer Rupees A/C No: ICICI Bank Limited, Dombivli Branch, Atul Biswas MIDC, Dombivli RTGS / NEFT IFSC Code ICIC ii ‘ ii ‘ ‘ :

Indian Financial System Code (IFSC) is an alpha numeric code designed to uniquely identify the bank branches in India. This is 11 digit code with first four characters representing the bank code, the next character reserved as control character (presently 0 appears in the fifth position) and remaining 6 characters to identify the branch. THE MICR code has 9 digit to identify the bank-branch.

The code consists of 11 Characters : (e.g ICIC ) First 4 characters represent the entity (ICIC ) Fifth position has been defaulted with a '0' (Zero) for future use (ICIC ) Last 6 character denotes the branch identity (ICIC )

IFSC is being identified by the RBI as the code to be used for various payment system projects within the country, and it would, in due course, cover all networked branches. As on November 30, 2010 there are more than 72,000 RTGS enabled bank branches. So you can get IFSC and MICR code for all those bank/branches. RBI has since advised all the banks to print IFSC on cheque leaves issued to their customers.

What are the benefits? The main benefit is less paperwork. No lower limit: Any amount can be transferred in this facility. It doesn't make any difference even if the amount is as low as one rupee.

What are needed? The bank account number, branch code, name of the branch and IFSC code are all that are needed to transfer funds through this mode. One must also need to maintain enough funds in the account before making the transfer.

What are the necessary safety precautions? As it is an online process, the customer has to take care of his online banking passwords to prevent any case of fraud. Thus in total it is a fast, cheap and very efficient mode of transferring money and hence is making financial transactions easy day by day.

National Electronic Fund Transfer System: NEFT is also an electric fund transfer system that operates on a Deferred Net Settlement (DNS) basis, which settles transactions in batches. In DNS the settlement takes place at a particular point of time. All transactions are held up till that time. For example, NEFT settlement takes place 6 times a day during the week days (9.30am, 10.30, noon, 1.00 pm, 3.00 pm and 4.00 pm) and 3 times on Saturdays (9.30am, and noon). Any transaction initiated after a designated settlement time would have to wait till next designated settlement time.

Whereas in RTGS, transactions are processed continuously throughout the RTGS business hour. What is the minimum and maximum amount stipulated for RTGS? The RTGS system is primarily for large value transactions. The minimum amount to be remitted through RTSG is 1.00 Lakh. However, this limit has been revised, and any amount can be remitted through RTGS> There is no upper ceiling for RTGS transaction. No minimum or Maximum stipulation has been fixed for NEFT transactions.

Under normal circumstances the beneficiary branches are expected to receive the funds in real time as soon as funds are transferred by the remitting bank. The beneficiary bank has to credit the beneficiary account within two hours of receiving the funds.

National Financial Switch With a view to inter-connect the ATMs in the country and facilitate easy banking for the common man, The Institute for Development and Research in Banking Technology has conceptualized, developed and implemented the National Financial Switch. The National Financial Switch facilitates routing of ATM transactions through inter-connectivity between the Bank's Switches, thereby enabling the citizens of the country to utilize any ATM of a connected bank.