There is a lot of information to get your head around when setting up an online money transfer; whether it’s your first international payment or your 100th, some of the terminology used for overseas remittances can be confusing. In this guide, we will outline exactly what SWIFT and IFSC codes are, their format, when and where they are needed, and how they work.
You may have been prompted for a SWIFT or IFSC code in the past, depending on the requirements of your overseas transfer, but when is this information needed? We investigate.
SWIFT codes are alphanumeric codes used by the Society for Worldwide Interbank Financial Telecommunication network, when identifying the bank location, country, and branch number of an international transfer.
An Indian Financial System Code (IFSC code) is an alphanumeric code used to identify bank branches within the National Electronic Funds Transfer (NEFT) network. The NEFT network is an electronic funds transfer system monitored and maintained by the Reserve Bank of India (RBI).
The format of SWIFT codes can range from 8 to 11 alphanumeric characters and they are divided into 4 categories to separate each of the different details they refer to: address, country and branch number of the bank.
An example of a SWIFT Code: AAAABBCCDDD
AAAA: Bank code. These 4 letters usually look like a shortened version of the bank name
BB: Country code. These two letters represent the country the bank is in
CC: Location code. These two characters will indicate where the bank’s head office is located
DDD: Branch code. The last three characters will indicate the specific branch of the bank
Taking the form of 11-characters, IFSC codes are split into 3 sections: the first 4 alphabetic characters represent the bank’s name, the 5th character is typically zero (0) as a way of reserving this space for future utilisation, and the final 6 characters (a mix of alphanumeric characters) represent the branch.
An example of an IFSC code: The Reserve Bank of India’s IFSC code is RBIS0CBICER
RBIS: the bank’s name, the Reserve Bank of India
0: reserved for future use
BICER: the bank’s branch code
The SWIFT network facilitates the sending and receiving of secure messages between banks and financial institutions in order to complete payment instructions. Funds are not physically transported using the SWIFT network, the codes simply convey payment instructions.
IFSC codes facilitate the instant transference of funds from one bank account to another in India.
The SWIFT network is utilised by over 200 countries around the world, and more than 11,000 financial institutions use SWIFT codes to initiate international payments. These institutions include banks, foreign exchange brokers, clearing houses, depositories, brokering institutes, trading houses and asset management companies.
IFSC codes are used by electronic payment settlement systems in India, such as Real-time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT) and Centralised Funds Management System (CFMS).
SWIFT codes can be accessed via bank statements, online banking accounts or by contacting the specific bank directly and ask for the SWIFT code.
Searching through the RBI website’s list of banks and codes is one way to find the IFSC code you need; or you can contact the bank directly and ask for the code. The IFSC code is also printed on cheques and bank statements.
SWIFT codes are needed to process international money transfers as they are used to verify the financial institution(s) involved.
IFSC codes are mandatory for money transfers from one Indian bank account to another. Every bank branch will have a unique code and it is not possible for two IFSC codes to be the same.
We hope this guide has cleared up any confusion you may have had when dealing with SWIFT or IFSC codes. At MoneyTransfers.com we do our best to impart advice and information so our users have everything they need to make a swift and successful international money transfer. To summarise: SWIFT/BIC codes are required almost any time money is transferred internationally to a bank account; whereas IFSC codes are only needed when sending money from one bank to another in India or sending money from overseas to an account in India.
April is a journalist and Content Editor for MoneyTransfers.com. Over the last decade she has written for a range of online and print publications. Having lived overseas in Canada and Vietnam, April hopes to see more of the world as soon as possible, with Japan at the top of her travel list. She enjoys writing about forex trends and the future of banking.