What changed
RBI noted that remitters often did not know the IFSC of the remitting or receiving branch, leading to funds reaching wrong destinations in RTGS and NEFT. To address this, RBI decided to mandate printing the branch's IFSC on cheques, above the MICR band, while MICR remains for cheque processing. Banks are also advised to speed up IFSC allotment and inform IDRBT for a central directory.
What it means for you
For banks, this means operational work to assign IFSCs to all branches and update cheque printing templates. It aims to reduce misrouted funds, improving payment system reliability. Lenders must coordinate with IDRBT and ensure branch-level compliance.
What you must do
- Expedite IFSC allotment to all branches in the IDRBT-prescribed format.
- Update cheque printing specifications to include IFSC just above the MICR band.
- Communicate this advice to all controlling offices and branches immediately.
- Advise RBI of action taken as requested in the circular.
Who it affects
All scheduled commercial banks, Cheque printing and operations teams, Branch managers and controlling offices, Corporate customers and individuals using RTGS/NEFT
Why is IFSC being printed on cheques?
To help remitters easily find the correct IFSC for their branch, reducing errors in RTGS and NEFT fund transfers that previously caused funds to reach wrong destinations.
Does this change how cheques are processed?
No. The MICR code line continues to be used for cheque processing. IFSC is an additional code printed above the MICR band for electronic payment routing.
What is the deadline for compliance?
The circular does not specify a deadline, but banks are advised to expedite IFSC allotment and printing. Immediate action is expected.