Banking Terminology

Swift Code: ISO 9362 (also known as SWIFT-BIC, BIC code, SWIFT ID or SWIFT code) is a standard format of Bank Identifier Codes approved by the International Organization for Standardization (ISO). It is the unique identification code of a particular bank. These codes are used when transferring money between banks, particularly for international wire transfers, and also for the exchange of other messages between banks. The codes can sometimes be found on account statements.

IFSC Code:The Indian Financial System Code (IFSC) is being used as the addressing code in user-to-user message transmission. The Payment System Applications such as RTGS, CFMS and NEFT developed by the Reserve Bank of India (RBI) use these codes. The code consists of 11 characters - first 4 characters (4!A) represent the entity; fifth position has been defaulted with a '0' (Zero) for future use; and the last 6 characters (6!X) denote the branch identity.

MICR Code: Magnetic Ink Character Recognition, or MICR, is a character recognition technology used primarily by the banking industry to facilitate the processing of cheques. The technology allows computers to read information (such as account numbers) off of printed documents. Unlike barcodes or similar technologies, however, MICR codes can be easily read by humans.The use of magnetic printing allows the characters to be read reliably even if they have been overprinted or obscured by other marks, such as cancellation stamps. Almost all Indian, US, Canadian and UK checks use the E-13B font.

IFSC is being identified by the RBI as the code to be used for various payment system projects within the country, and it would, in due course, cover all networked branches in the country. In due course, when all bank branches participate in electronic payment systems, they would need to have a single identifiable unique code and IFSC would serve the purpose effectively.

Real Time Gross Settlement system (RTGS): The Reserve Bank of India (India's Central Bank) maintains this payment network, which is available on weekdays only from 10 am to 1:30 pm. Fees for RTGS vary from bank to bank. Both the remitting and receiving must have Core banking in place to enter into RTGS transactions. RTGS is a large value (minimum value of transaction should be Rs. 1,00,000) funds transfer system whereby financial intermediaries can settle interbank transfers for their own account as well as for their customers.

National Electronic Fund Transfer: It is an online system for transferring funds of Indian financial institution . This facility is used mainly to transfer funds below Rs. 1,00,000.The key difference between RTGS and NEFT is that while RTGS is on gross settlement basis, NEFT is on net settlement basis.