RBL Bank limited was founded in August 1943 as a scheduled commercial bank and is headquartered in Mumbai, India. Today, the financial institution is recognized as one of the oldest bank in the private banking sector of India. RBL bank offers an ample financial and banking products and services under the category of 5 verticals, namely corporate and institutional banking, retail banking, commercial banking, financial markets, and agri and development banking.
RBL bank is one among the fastest growing private sector bank having its business expansion across the country. Currently, it has a network of over 246 branches and 393 ATMs across 20 Indian states and Union Territories. The bank has received several national and international recognition awards including:
a. CNBC ASIAs India Talent Management Award (2017);
b. Indias Best Bank (Growth) in the Small Sized Bank Segment by Business Today KPMG Best Bank Study for six consecutive years (2012-17);
c. Business Worlds Best Growing Small Bank for the year 2013, 2014, 2015, and 2017
d. Recognized as a Global Growth Company (GGC) by the World Economic Forum
The bank offers several banking services designed to meet specific needs of every individual. Moving along with the technology, the RBL bank also provides internet and mobile banking services to its customers, in order to deliver best in class banking experience. Electronic or digital banking is much faster than the traditional banking services. One does not have to stand in long queues to conduct the transactions. Just sit at your sofa and carry out the fund transfer methods on an electronic platform like NEFT (National Electronic Fund Transfer), RTGS (Real Time Gross Settlement), and IMPS (Immediate Payment Service). However, in order to complete the transaction successfully, you need to provide RBL bank IFSC code, which makes it easy for the RBI to recognize the participating bank branches and process the transaction without taking much time in the validation process.
IFSC is an Indian Financial System Code which is provided by the RBI to every bank branch. In April 2012, the Reserve Bank of India had passed the guidelines where it was mentioned that it is mandatory for all bank branches to mention MICR and IFSC code in passbook and at the bottom of every cheque leaf.
IFSC is an 11 digit alphanumeric unique identity code, where the first four alphabets denote the name of the bank, the fifth character is zero, and the last six digits denote the bank branch code. This unique identity code facilitates the online payment system in India. The transactions can be made with any public sector, private sector, or international banks because RBL IFSC code acts as a unique identifier for every bank branch and there is no such way where two different bank branches can have the same IFSC code.
MICR is a Magnetic Ink Character Recognition technology, which is used for speeding up the cheque clearance process. Both IFSC and MICR coding systems were introduced by the RBI to ensure faster transaction processing in a highly secured environment. MICR is a 9 digit unique identity code which can be founded at the bottom of every cheque leaf. Out of 9 digits, the first three digits denote the city code, the next three digits denote the bank code, and the last three characters signify the bank branch code. MICR code and IFSC code are both allotted by the RBI. This nine digit unique code helps the Reserve Bank of India in the cheque sorting and clearance process.
This ink character recognition technology is used in the banking industry primarily for facilitating faster processing of cheques. The characters of the code are printed in special typefaces using special magnetic ink that allows the systems to read the information even if the code had been overprinted or covered by any marks. This system reduces the possibilities of manual errors and there is less than 1% chance for unable to read error or misreading the characters. The risk is lesser than that found in other conventional system such as optical recognition technology. RBL bank MICR code also reduces the risk of fraudulent as the machine only reads the genuine characters. For example, if someone takes out a colored photocopy of the cheque, then the machine will reject the cheque and will not read the counterfeit characters. The machine will also reject the cheques if someone is having poor cheque-bounce records.
There is a structured format of using RBL bank IFSC code in the RTGS (Real Time Gross Settlement) fund transfer method.
a. On requesting the transaction, payment instructions are sent by the remitting bank to the Reserve Bank of India, controller of all banking transactions
b. The message is then acknowledge by the RBI, which then sends the original message along with certain set of instructions including amount to be transferred, the issuing and receiving banks, and IFSC code of the beneficiary bank
c. On completing the validation process, the beneficiary bank credits the recipients bank account with the transferred amount.
d. The sender will be notified through an SMS or email once the transaction is complete.
There are certain benefits of using the RTGS fund transfer method like the transactions are done on real time basis. The credit and liquidity risks are purged by this money settlement system, as the beneficiary account will instantly receive the funds within 30 minutes right after the request or instruction is accepted by the central bank, i.e. the Reserve Bank of India. The payments made are final and irreversible because settlement system takes place in the books of the RBI.
NEFT (National Electronic Fund Transfer) is another fund transfer system that is conducted on an electronic platform. There is no lower or upper limit unlike the RTGS, where the minimum transaction value should be Rs.2 lakhs. The funds are settled in specific hourly batches under NEFT system. There are 12 settlement batches on weekdays (from Monday to Friday) between 8 am to 7 pm and 6 settlement batches on Saturdays from 8 am to 1 pm. If the transactions do not fall between the designated settlement batches, then they are processed in the next settlement period. However, time consumed for completing the payment, depends on how quickly a beneficiary bank have processed the fund request. The fund transfer request under RBL bank NEFT system involves filling out of an application form along with all the mandatory information filled about the beneficiary such as beneficiary name, recipient bank, account number, account type, IFSC code, and amount to be transferred.
The application form is available at all RBL Bank branches or other financial institutions where the facilities of internet and mobile banking are availed. Some banks also offer fund transfer facilities through ATMs. You can authorize your bank branch for making a settlement of specified amount to a beneficiary account. On receiving the transaction request, a notification will be sent to NEFT, who will then forward the request to the Reserve Bank of India. On completion of validation process done by the RBI, the beneficiary bank will be notified to credit the recipients bank account with the specified amount of the fund transferred.
Thus, both RBL Bank IFSC and MICR code serves the same agenda of identifying the bank branch and processing the transaction in a highly secured environment. However, the format for both IFSC code and MIRC code is different. Also, the codes are used for different fund transfer process like RBL bank MICR code is used for faster cheque clearance; whereas, RBL bank IFSC code is used for electronic fund transfer methods like NEFT, RTGS, and IMPS. These codes speed up the payment process and reduces the risk of manual errors and fraudulent.
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