What is the difference between Bank IFSC Code and Bank SWIFT Code?

 Banking in the world has been controlled by various systems which will facilitate the transfer of funds from one account to another.

Even countries when engaged in trading use various banking systems to transfer funds.

The Bank IFSC Code and SWIFT Code are such financial system that uses various codes to facilitate fund transfers.

In this article, we will discuss, what is the difference between Bank IFSC Code and Bank SWIFT Code, Structure, features, examples for using the code, etc.

IFSC Code

IFSC Code stands for the Indian Financial System Code which is a code used to transfer funds within India. This system was introduced by the RBI to facilitate fund transfer in India.

The mechanism of the IFSC Code is standardized such that it is easy and effective for the user to transfer funds.

The IFSC Code will be issued to different branches of the bank functioning in India. For example- the State Bank of India Rohini branch IFSC Code has an IFSC Code of SBIN0021223 which is unique to the branch and can only be used by individuals having an account with the same branch.

IFSC Code Structure

IFSC Code is an 11-digit alphanumeric code and has the first four-digit as a bank code like in the above example SBIN is for State Bank of India.

The next number i.e. 5^th number is 0 which is for future expansion of the branch followed by the next 6 digits which are for the branch code. This structure is standard for every bank functioning in India.

Features of IFSC Code

IFSC Code has multiple features which makes it special and useful for the Banks to facilitate fund transfer. The following are the features that might be useful-

·         It helps in reducing the mismanagement of the fund transfers

·         It helps you in identifying the bank branch easily

·         Every bank branch in India has a unique bank branch code that will help you in transferring funds.

SWIFT Code

Swift stands for Society for Worldwide Interbank Financial Telecommunication.SWIFT Code is a code used for international fund transfers, Every country has an access to the SWIFT Code except Russia.

Using the SWIFT Code merchant in one country can pay for the goods he/she bought in the other country. SWIFT is the backbone of international trade and every country is required to do trade using the SWIFT Code.

SWIFT Code Structure

SWIFT code is an 8 to 11-digit code used to transfer funds internationally. The first 4 digits in SWIFT are the bank code followed by 2 digit placeholder code usually 0 and the last 3 digits will be the location code.

If the code is 11 digits, then everything mentioned above will be the same however, the last digits will be of the branch code.

Features of SWIFT Code

The following are the features of the SWIFT Code-

·         It is used internationally and is capable of sending funds from one country to another

·         It is a global standard for the world trade

·         It is widely accepted by countries around the world