IFSC (Indian Financial System Code) is a 11 digit alphanumeric code that helps you to identify bank branches. The IFSC code is read by a machine so that there is no chance of an error while passing of the cheques. This makes fund transfer very fast.
The first four characters represent the bank The fifth number is a control character (0). The next six numbers denote the bank branch.
For example, the IFSC for SBI Bank's Janakpuri branch in New Delhi reads as SBIN0001706. In this SBIN represents the Bank, i.e. State Bank of India. Next character '0' is default and is used for future purposes. The next 6 numbers, i.e. 001706 represents Bank Branch. This code is mentioned on your cheque.
When do you need IFSC code: When sending money through RTGS or NEFT, you need to know the IFSC of the receiving branch.
The MICR (Magnetic Ink Character Recognition) is a nine digit number printed on a cheque or a demand draft using a special magnetic ink.
The first 3 digits give you the name of the city.
The next 3 digits give you the name of the bank.
The last 3 digits give you the bank branch.
For example, the MICR code for SBI Bank's Janakpuri branch in New Delhi reads as 110002054. In this 110 denotes New Delhi, 002 denotes SBI Bank and 054 denotes the Janakpuri branch of the bank.