Facts you should know
ALL ABOUT CHEQUE LEAF (20 Oct 2014)


All About your cheque leaf:

Almost all of us issue a cheque towards various payments, which involves just filling up the name to whom we make the payment, the amount in numbers and words, the date and sign it off.
 
While filling up application forms, we are required to fill up lots of minute details which in many occassions we do mechanically without knowing what they actually mean.
 
Only when we are asked to provide details like Bank Code / Branch code we start scrambling with the cheque to understand the embedded meaning.
 
Here we debug a cheque leaf:
 
  • MICR Code:
    • MICR stands for magnetic ink character recognition
    • MICR codes are used in Indian financial institutions. 
    • This nine-digit code stands for the city, bank and branch of a bank and is used for processing and posting cheque.
    • This nine-digit code is printed on checks using a special type of ink that contains magnetic material. 
    • The machines read the magnetic information. 
    • The information tells what bank the check is from and whose account it is. 
    • The first three numbers tell the city of the bank. 
    • The next three numbers state which bank it is and 
    • The last three numbers tell which branch of the bank it is from.
  • IFSC Code:
    • The Indian Financial System Code (IFSC) is an alphanumeric code that uniquely identifies a bank-branch participating in the two main electronic funds settlement systems in India: the real time gross settlement (RTGS) and the national electronic funds transfer (NEFT) systems. 
    • IFSC is used by the NEFT & RTGS systems to route the messages to the destination banks/branches.
    • This is an 11-character code with the
      • First four alphabetic characters representing the bank, and
      • The last six characters (usually numeric, but can be alphabetic) representing the branch.
      • The fifth character is 0 (zero) and reserved for future use. 
  • Bank Code: It is the middle 3 digits of the MICR Code (9 digits)
  • Branch code: It is the last 6 digits of the IFSC Code
All of us issue a cheque towards various payments, which involves just filling up the name to whom we make the payment, the amount in numbers and words, the date and sign it off.
 
While filling up application forms, we are required to fill up lots of minute details which in many occassions we do mechanically without knowing what they actually mean.
 
Only when we are asked to provide details like Bank Code / Branch code we start scrambling with the cheque to understand the embedded meaning.
 
Here we debug a cheque leaf:
 
  • MICR Code:
    • MICR stands for magnetic ink character recognition
    • MICR codes are used in Indian financial institutions. 
    • This nine-digit code stands for the city, bank and branch of a bank and is used for processing and posting cheque.
    • This nine-digit code is printed on checks using a special type of ink that contains magnetic material. 
    • The machines read the magnetic information. 
    • The information tells what bank the check is from and whose account it is. 
    • The first three numbers tell the city of the bank. 
    • The next three numbers state which bank it is and 
    • The last three numbers tell which branch of the bank it is from.
  • IFSC Code:
    • The Indian Financial System Code (IFSC) is an alphanumeric code that uniquely identifies a bank-branch participating in the two main electronic funds settlement systems in India: the real time gross settlement (RTGS) and the national electronic funds transfer (NEFT) systems. 
    • IFSC is used by the NEFT & RTGS systems to route the messages to the destination banks/branches.
    • This is an 11-character code with the
      • First four alphabetic characters representing the bank, and
      • The last six characters (usually numeric, but can be alphabetic) representing the branch.
      • The fifth character is 0 (zero) and reserved for future use. 
  • Bank Code: It is the middle 3 digits of the MICR Code (9 digits)
  • Branch code: It is the last 6 digits of the IFSC Code