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What is IFSC?

By May 13, 2024May 16th, 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 was £39.0 billion, marking a 4.8% increase from the previous year. Of this total:

  • UK exports to India totaled £15.8 billion, indicating a decrease of 3.4% (£549 million) compared to the previous year.
  • UK imports from India amounted to £23.2 billion, showing an increase of 11.2% (£2.3 billion) compared to the previous year.

India ranked as the UK’s 12th largest trading partner during this period, contributing 2.2% to total UK trade.

Additionally, in 2021:

  • 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.
  • India’s inward FDI stock in the UK was £9.3 billion, representing 0.5% of the UK’s total inward FDI stock.

For businesses and individuals maneuvering the complexities of cross-border payments between the UK and India, whether it’s for transferring funds back home or settling payments with suppliers or contractors, understanding the significance of the IFSC code can be pivotal. Yet, many may encounter the IFSC code and wonder what it is and where to get it.

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-IFSC-Code

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.