Ever wondered, what happens if you enter a Wrong IFSC code during bank transaction?
When making online fund transfers, entering the correct Indian Financial System Code (IFSC) is crucial. A mistake in the IFSC could lead to financial loss, as each bank branch has a unique IFSC code.
Understanding IFSC Codes
The IFSC is an 11-digit alphanumeric code that identifies specific bank branches in India. The first four characters represent the bank, the fifth character is always “0,” and the last six digits denote the branch. For example, in the IFSC code SBIN0040278, “SBIN” indicates State Bank of India, while “40278” specifies a particular branch.
Importance of Correct IFSC Entry
To transfer funds using methods like NEFT, RTGS, or IMPS, you must register the beneficiary’s bank account. This includes providing their name, bank name, account number, and IFSC. According to Reserve Bank of India (RBI) regulations, including the payee’s name is mandatory for online transfers. Some banks may verify this name against the account details as an additional security measure.
Consequences of Entering an Incorrect IFSC
Different Branch of the Same Bank: If you mistakenly enter the IFSC for a different branch but within the same bank (e.g., transferring funds to SBI Noida but entering Connaught Place’s IFSC), the transfer may still succeed if other details are correct. The system relies on the account number and name of the account holder to facilitate this transfer. However, not all banks verify beneficiary names before processing transactions.
Different Bank: If you select an IFSC from a different bank (e.g., transferring to ICICI Bank but using SBI’s IFSC), whether the transfer goes through depends on whether that bank has an account with the same number as specified. While rare, it’s possible for two banks to have identical account numbers.
Risks and Precautions
Online fund transfers are convenient but come with risks. Once money is credited to an incorrect account, retrieving it can be challenging. Users should double-check all details before confirming transactions to avoid financial mishaps.
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