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What is the Difference Between an IFSC Code and a MICR Code

In banking parlance, the IFSC and MICR code are quite popular terms; however, one should not get confused as they have different functions. To put it simply, an IFSC Code facilitates the smooth and hassle free functioning of deposit and/or withdrawal-related processes within financial institutions. A MICR code, on the other hand, essentially is equivalent to an identity card for the institution in question. However, their uses go far beyond just that.

But, before we talk about the differences between an IFSC Code and a MICR Code, it is important to go over those very concepts so that your memory concerning the same is refreshed. What you will find below are the definitions of the two aforementioned terms as well as their significance. Read on to know more.

IFSC Code vs MICR Code





This code facilitates the transfer of funds from one bank account to another digitally.

This code helps in swift and hassle-free clearing of cheques.


It is an 11-characters-long alphanumeric code.

It is a 9-digit-long numeric code.

Which characters are indicative of the bank?

The first four characters of an IFSC code are indicative of the bank it has been assigned to by the RBI.

The first three digits of a MICR code are indicative of the bank it has been assigned to by the RBI.

Which characters are indicative of the bank branch?

The last six characters of an IFSC Code are indicative of the bank branch.

The last 3 digits of a MICR Code is indicative of the bank branch.

What is an IFSC Code

An Indian Financial System Code (IFSC) is a distinctive 11-digit alphanumeric figure that is needed for the purpose of making financial transactions through means such as RTGS, NEFT, and IMPS. IFSC Codes are allotted by the Reserve Bank of India to all the banks that have their operations set up in India, with every branch being allotted their own unique IFSC Code. The IFSC codes are typically printed on documents essential for banking transactions such as the cheque book and the account holder’s passbook, amongst others. The same can also be found on the Reserve Bank of India’s official website by those who have details pertaining to the location of the bank they want to interact with but do not have its IFSC code. An IFSC code is also essential for those who want to perform all kinds of financial transactions digitally, with the exception of that of UPI-based payments.

Now that your memory of what is an IFSC Code has been refreshed, let us take a look at the concept of a MICR Code. Additionally, details pertaining to the same, such as the places where it can be found and what is it specifically used for will also be shared through the paragraph that follows. Let us take a dive into the concept of the same now.

What is an IFSC Code Essentially Used for

When initiating an electronic fund transfer, the payer has to fill in the details pertaining to the payee such as the name of their bank, the location of their branch, their account number and then lastly, the previously-mentioned IFSC code of bank of the payee. Once this particular step has been completed, the funds that have been transferred will find a way to the account of the payee without any hassle and in a short span of time. Essentially, what an IFSC Code does is that it helps in making sure that the right payee receives the funds that they are due.

What is a MICR Code

A Magnetic Ink Character Recognition (MICR) Code is something that is used for the purpose of authenticating the credibility and legality of the banks involved while filing the application documents for financial instruments such as investment portfolios and SIPs, amongst others. Much unlike IFSC, a MICR Code is made up of 9 digits and can typically be found on the bottom left corner of the cheques. MICR code, in addition to serving the function of an Identity Card for RBI’s record keeping purposes, serves functions similar to that of a barcode for the institution in question, with the exception of the fact that MICR Codes can be easily told apart and be read by human eyes.

What is a MICR Code Used for?

Additionally, this particular form of identification code is used by banks to verify the cheques prior to clearance. As far as the information stored in a MICR Code is concerned, they include details such as the code of the bank as per the RBI’s records, account details and cheque number. The existence of such details pertaining to the bank on a cheque enables their efficient, quick and error-free processing.

In order to sum up all of the information regarding the two forms of credentials provided through the paragraphs above, a table which highlights their individual differences has been created. The same can be found below.

If you want to learn more about IFSC and MICR Codes and what sets those two apart, you can always educate yourself further through Finserv MARKETS.

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