Difference Between IFSC and MICR Code


IFSC code and MICR code are terms that are increasingly becoming common in everyday parlance. However, there are some who are still not aware of these concepts and remain confused by them. This article intends to clarify the differences between these two terms by highlighting their features and functions.

IFSC code

On the pattern of SWIFT codes, Reserve Bank of India has developed a code for money transfer between different banks located across the country. It is known as IFSC code and stands for Indian Financial System Code. This code is a must for various payment systems such as NEFT, RTGS and CFMS. The code, which is alphanumeric, is made up of 11 characters of which the first 4 characters are reserved for identification of the bank. The fifth character is currently being kept as zero to provide for future expansion of the bank while the last 5 characters tell the location of the bank branch. Let us see it through an example


Here the bank is Indian Overseas bank while 684 is the location of the branch (happens to be in Lucknow, UP)

MICR code

MICR is Magnetic Ink Character Recognition that facilitates processing of cheques. The code makes it possible to process thousands of cheques easily which was a big headache previously. It is a nine digit code that contains numerals only. It identifies both the bank and the branch that issued the cheque. The first three digits of this MICR represent the city; next three represent the identity of the bank while the last three digits tell the identity of the location of the bank branch.

The MICR code of a bank is always printed on the cheques issued by the bank and for every branch of every bank, this MICR code is unique. Unlike optical character recognition, MICR has very small error rate and can be easily read by people also.

In brief:

• While IFSC is a code developed by RBI for money transfer between banks within India, MICR is a Magnetic Ink Recognition technology for making cheque processing faster and simpler.

• IFSC is patterned along the lines of SWIFT codes.

• While IFSC code is alphanumeric and contains 11 digits, MICR is a nine digit code made up of numerals only.

• Both IFSC and MICR have made banking faster and simpler.