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What is an IFSC Code?

May 13, 2024June 13th, 2024No Comments

In the four quarters leading up to the end of Q4 2023, the total trade (exports plus imports) between the UK and India amounted to £39.0 billion, marking a 4.8% increase from the previous year. This trade relationship highlights the economic interdependence and growing commercial ties between the two nations.

Detailed Trade Figures

UK Exports to India

    • UK exports to India totaled £15.8 billion, indicating a decrease of 3.4% (£549 million) compared to the previous year. This decline could be attributed to various factors such as market demand fluctuations, trade policies, or economic conditions in India.

UK Imports from India

    • UK imports from India amounted to £23.2 billion, showing an increase of 11.2% (£2.3 billion) compared to the previous year. The rise in imports underscores India’s role as a crucial supplier of goods to the UK, reflecting the competitive advantage of Indian products in the UK market.

Trade Rankings and Economic Impact

During this period, India ranked as the UK’s 12th largest trading partner, contributing 2.2% to the total UK trade. This ranking highlights the significant economic impact of UK-India trade relations and underscores the importance of maintaining and enhancing these ties for mutual economic benefit.

Foreign Direct Investment (FDI) between the UK and India

UK’s Outward FDI in India

    • In 2021, the UK’s outward foreign direct investment (FDI) stock in India was £19.1 billion, accounting for 1.1% of the UK’s total outward FDI stock. This investment reflects the confidence of UK businesses in the growth potential of the Indian market and their commitment to establishing a strong presence in India.

India’s Inward FDI in the UK

    • India’s inward FDI stock in the UK was £9.3 billion, representing 0.5% of the UK’s total inward FDI stock. This investment highlights the strategic importance of the UK as a destination for Indian businesses looking to expand their global footprint.

Navigating Cross-Border Payments between the UK and India

For businesses and individuals maneuvering the complexities of cross-border payments between the UK and India, understanding the significance of the IFSC code is crucial. This code is pivotal for transferring funds, whether for personal remittances or settling business payments with suppliers or contractors.

What is an IFSC code?

An Indian Financial System Code (IFSC) is an 11-character alphanumeric code used for international and domestic payments to India. Its primary function is to distinguish between various bank branches participating in online financial transactions. Each branch possesses a unique IFSC code, facilitating electronic fund transfers and ensuring the accurate routing of transactions. Typically found alongside the bank account number on a cheque or bank statement, the IFSC code comprises the bank’s name represented by the first 4 characters, followed by a numeric 0 (the 5th character), and concludes with 6 characters indicating the branch. The IFSC is necessary for making payments to bank accounts in India via NEFT and IMPS payment routes. The IFSC code can be obtained from your recipient; it’s usually found on the chequebook or bank statement. here’s an example of an IFSC code for a bank branch in India:

Bank: State Bank of India (SBI) Branch: Connaught Place, New Delhi IFSC Code: SBIN0000691

In this example:

  • “SBIN” represents the bank’s name (State Bank of India).
  • “0” indicates the fifth character as a numeric value.
  • “000691” represents the branch code for the branch in New Delhi.

What is NEFT?

NEFT, short for National Electronic Funds Transfer, is a centralised payment system in India owned and operated by the Reserve Bank of India (RBI). It allows for secure and nearly real-time transfer of funds to beneficiary accounts, accessible 24/7 throughout the year. Transactions can be initiated online through internet or mobile banking provided by member banks, or in person at bank branches. NEFT operates in batches throughout the day. It’s available for use by individuals, firms, and corporates maintaining accounts with any participating bank to transfer funds electronically to accounts at other banks in the country. Funds are typically received by the beneficiary within two hours of batch settlement. If funds aren’t credited on time, the originating bank must return the transaction to the remitter, and delays may result in penalty interest for the bank. Accuracy in providing beneficiary details is crucial to ensure smooth NEFT transactions, as there is no option to recall or trace payments made using this scheme.

What is IMPS?

IMPS, or Immediate Payment Service, is an instant electronic fund transfer service that allows inter and intra-bank transfers in India. With IMPS, you can send money in real-time, and it will be credited to the beneficiary’s account within seconds. The service is available 24×7 throughout the year, including on Sundays and bank holidays. You can access IMPS through multiple channels such as mobile banking, SMS, net banking, or even ATMs. To initiate a transaction via IMPS, you need either the mobile number and MMID of the beneficiary or their account number and IFSC code.

Sending money to India?

You can view our page here, which provides detailed information about the exchange rates and payment routes to India.