Many of us frequently use cheque books to pay for all kinds of things. But do you know how to read a cheque beyond those first six digits, known as the cheque number? What do other numbers on the cheque say and how do they help the banking industry facilitate the processing of cheques? Here is the
info. on Bank Cheque:
A) In MICR (Magnetic Ink Character Recognition) bar four types of numbers will be there. These are:
Cheque Serial No (6 Digits): It is common wisdom that the first six digits on your cheque are your cheque number. It is important to note the number because if your cheque gets lost or the money has not been credited, you can know the status of the cheque by providing the cheque number.
MICR (Magnetic Ink Character Recognition): The second nine-digit code is called MICR because it is printed with magnetic ink, which is usually made of iron oxide. Magnetic ink is used so that numbers are readable even if it is stamped over. Magnetic ink character recognition or MICR comprises nine digits, which are further sub-divided as city, bank and branch code. It works the same way as your home or office address, enabling your snail mail to reach you from far-flung places. But unlike your addresses, the banking address is all numerical, where:
City Code: The first three digits specify the city in which you have a bank account.
Bank Code: The next three digits of MICR specify your bank in that particular city.
Branch Code: The last three digits of MICR help in figuring out the specific branch of the specific bank.
For Example in "600240006"
600 (City: Chennai),
240 (Bank: HDFC),
006 (Branch: Nungambakkam)
A/c with RBI: The third numeral block represents your account number maintained by the Reserve Bank of India (RBI). Generally this will be in six digits. The number helps in cheque processing when it goes to RBI for clearance.
Transaction code: The last two digits at the bottom of the cheque help in decoding whether the cheque is current or a saving account cheque. MICR also tells whether the cheque is at par. It helps in processing an intra-city cheque as a local one with a faster turnaround time.
B) For Nation wide Money transfer (eg. Electronic money transfer) you need IFSC (Indian Financial System Code) Code.
IFSC is being identified by the RBI (Reserve Bank of India) as the code to be used for various payment system projects within the country, and it would, in due course, cover all networked branches in the country. In due course, when all bank branches participate in electronic payment
systems, they would need to have a single identifiable unique code and IFSC would serve the purpose effectively.
Its a code used for all sort of electronic money transfer purpose. The code gives a specific identification figure to the branches of the banks and hence eliminates any chaos as its a unique
for every branch, be it in the same or different city.
The IFSC Code Consists of 11 Characters (For example HDFC0000082):
First 4 characters (HDFC) represent the entity
Fifth position (0) has been defaulted with a '0' (Zero) for future use
The Last 6 characters (000082) denotes the branch identity.
Many of the bank cheques provide this code. The cheque will have this code mostly near the Bank's branch address.
One can also get this code from the following link.
C) For International wire transfer, you will definitely need the SWIFT Code (Society for Worldwide Interbank Financial Telecommunication Code).
This code is also known as SWIFT-BIC, BIC (Bank Identifier Code) code, SWIFT ID or SWIFT code. It is a standard format of Bank Identifier Codes approved by the International Organization for Standardization (ISO).
It is the unique identification code of a particular bank. These codes are used when transferring money between banks,
particularly for international wire transfers, and also for the exchange of other messages between banks.
The SWIFT code consists of characters, which represents:
First 4 Characters represents Bank Code (Only Letters)
Second 2 Characters represents Country Code (Only Letters)
Third 2 Characters represents Location Code (Letters and Digits) (if the second character is '1', then it denotes a passive participant in the SWIFT network)
Last 3 Characters represents Branch Code (Letters and Digits), Optional ('XXX' for primary office)
This code can sometimes be found on Account Statements.
One can also get this code from the following link.
