IFSC stands for Indian financial system code which is alphanumeric and consists of 11 digit character. The first four characters represents the banks name, the fifth character is zero, the last six numbers or alphabets represents the specific branch of the bank. IFSC codes are very very important when money is transferred online from one bank to another bank. IFSC code is used for money transfer through NEFT,RTGS and IMPS.
NEFT stands for National Electronic funds transfer; this payment method is used by individuals and companies to transfer funds electronically from one account to other account.Neft process is very safe and secured and they are minimal chances of any errors.
RTGS stands for real time gross settlement where in funds can be transferred between different accounts and banks in real time.RTGS systems also validates the IFSC code before permitting the payment method.
IMPS stands for immediate payment service whereas here the funds can be transferred immediately by using IFSC code round the clock. National Payment Corporation of India has provided this facility.
The reserve bank of India is the central banking authority which controls and regulates all the banking affairs in india,RBI issues IFSC codes to all the banks in india. RBI has also issued strict guidelines to all the banks to publish the IFSC code on the cheque leaves.
If we enter wrong IFSC code while using NEFT or RTGS MONEY transfer using online banking funds would not be transferred, because for the interbank transaction to be successful all the information entered should be correct. Funds will only be transferred to other bank account only if both IFSC code and account number to which the money is to be deposited exist together. But a remitter will lose money even after entering wrong information only if the branch with the unintended IFSC code also has the account number. In most of the cases when you do enter it wrong one of the two will be correct. The banks system will fail to transfer money and the money will be sent back to the remitters account. The only loss of money will be due to the service charges imposed by the bank in initiating the interbank transfer. But even if the money gets transferred to the wrong branch recovering money back in such cases is very very difficult. To get your money back you will have to entirely be dependent on the other party. The other person into whose account you have transferred the money. You will get the complete information of the account holder through the branch of which you have used the IFSC code.