Difference between Swift Code and IFSC Code
Key Difference: SWIFT code is a code that is assigned to any institution that acts as the institution’s identity in the foreign market. IFSC stands for Indian Financial System Code. IFSC code is made up of eleven characters and is used to identify the branch of bank within India.
IFSC and SWIFT both codes are usually used in context to financial system. IFSC code is indigenous to India, devised for inter-banks transactions within the country whereas SWIFT code has been devised to be used for the international transactions.
SWIFT code is a short for an even longer acronym known as SWIFT/BIC - Society for Worldwide Inter-bank Financial Telecommunication/ Bank Identifier Code. This code was established in 1973 in Brussels as an identifier code. This code is assigned to both financial and non-financial institutions. When assigned to a business, it may also be known as a BEI or Business Entity Identifier. The purpose of this code is to allow easy transference of money between banks, specifically from one country to another. In addition to money, the banks also communicate with each other using this code and it can sometimes be found on bank statements.
SWIFT can also supply software and other services to banks and other financial institutions. The SWIFT code acts as the identity of the bank when it sends or receives a transaction. The code lets the other institutions know three main things the name of the bank, where the head office is located. For example the SWIFT code for the primary office of Deutsche Bank would be DEUTDEFF. The code is made up of:
DEUT – for Deutsche Bank
DE – for Germany, the country where the headquarters are located
FF – for Frankfurt, the city where the headquarters are located
The code is usually made up of 8-11 characters and is commonly made up such as the example given above: the name of the company and the city and country of the headquarters. This SWIFT code easily helps the institutions recognize each other. A person that is sending or receiving money from one country to another is commonly asked for the SWIFT code of the bank from which it is sending/receiving the money.
IFSC is a unique code and the code is of immense importance in carrying out the transactions in the banking sector. It is printed in the check books or can be easily found online by searching the code of the bank branch.
IFSC stands for Indian Financial System Code. It consists of eleven characters and this code has been assigned by Reserve Bank of India for the identification of the bank branches. It uniquely identifies any bank branch in India. This code is of immense importance for carrying out the electronic payments in the country.
The components of this alpha numeric code are:-
1. First four characters denote the code of Bank.
2. The fifth character is a ‘0’ and this is reserved for future use.
3. Remaining six characters define the specific branch of the bank.
The payment methods like RTGS, CFMS and NEFT in India uses this code. All the banks have been advised by Reserve Bank of India to print the IFSC code on the checks issued by the banks to their customers.
IFSC code is used by the banks of India to uniquely identify a bank branch and is used for making payments through RTGS or NEFT within the country, whereas SWIFT code is used for making the transaction between the different countries. SWIFT code has been developed by ISO, whereas an IFSC code has been introduced by Reserve Bank of India. SWIFT code has 8 or 11 characters while IFSC code contains 11 characters.
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