When we have to transfer money to someone's bank account we either do it by visiting a bank branch or through digital channels. The usage of the former is getting reduced day by day because most of the users prefer to transfer money digitally. While transferring money almost every bank requires adding beneficiaries. The required details to add a beneficiary is Banking name, Account Number, and IFSC Code.
It is a usual process we all follow every time we have to transfer money. Have you ever thought about what will happen if you enter the wrong IFSC Code? If yes then stay tuned with this article as here I have explored all the possibilities of entering the wrong IFSC Code. But before we understand the consequences of entering the wrong IFSC Code let's quickly talk about IFSC Code.
What is IFSC Code?
The Term IFSC Code is a short form of the Indian Financial System Code. It is a unique 11 character code assigned to every branch of nationalized banks in India. The IFCS Code is used in facilitating money transfer through NEFT, RTGS, or IMPS. Each branch has a unique code so it becomes easier to track all the transactions for the banks. The first 4 characters of an IFSC Code represent the bank name, the last 5 characters represent the branch code and in between, they are character zero.
What Will Happen If You Enter Wrong IFSC Code?
Now when you have a quick idea about IFSC Code let's finally come to our question what will happen if we enter the wrong IFSC Code while doing a money transfer. There are a number of situations possible if you enter the wrong IFSC Code. Suppose you entered a wrong IFSC Code that doesn't even exist then you will get an error while adding the beneficiary. Banking systems are smart enough these days they have all the correct IFSC Codes in their database so when you will enter a wrong IFSC Code they will error like the entered code is wrong.
Imagine another situation, If you are transferring money to an SBI account and instead of entering the correct IFSC Code of the branch you mistakenly entered the IFSC Code of a nearby branch. In this situation, the banking application will accept the code and save the beneficiary. Now when you will facilitate the transfer in that situation your transaction will go through. Bank will track the account number and correct the IFSC Code from their end. There are very high chances that the transaction will get complete and money will be received by the beneficiary. It is also possible some banks might reject the transaction if entered IFSC Code is not correct.
One more situation that is very less likely to happen but still we can't deny it that is entering an IFSC Code of another bank. Suppose you are transferring money to HDFC Bank and entered an IFSC Code of ICICI bank in that situation transaction will get rejected in most of the cases. But let's say the IFSC Code is of ICICI bank and the account number also gets matched somehow then it could be possible that money gets transferred to ICICI bank. This is something that is rare but it is possible because two banks might have the same account number.
Is IFSC code important?
Yes IFSC Code is important while making money transfer. Most of the banks require IFSC Code when you try to add a beneficiary. It is the IFSC Code that facilitates the money transfer.
Can we change the IFSC code after transfer?
Many people ask can they change IFSC Code after transfer. My answer is a big No. It is not possible to change IFSC Code after transfer. Once you have initiated a transaction either it will get through or get rejected.
How do I know if IFSC is correct?
You can check the IFSC Code of a branch online. You can visit the official website of the bank of RBI website. Also, there are many IFSC Code checker that you can use to know if IFSC Code is correct.
Does the IFSC code matter for money transfers?
Yes, IFSC Code matters for money transfers. You need to enter the correct IFSC Code of the branch in which you want to transfer the money. If you enter the wrong IFSC Code the transaction will get canceled or rejected by the banking institutions.
Anyway, it is advised to cross-check the account details properly while sending money. It is always better to take caution instead of regretting later. I would like to know if you have gone through a situation in which you entered the wrong IFSC Code. If yes what happened with the money. Did the transaction got failed or did it pass through? Do let our readers know about it.