What is swift code? What is IFSC Code? And how do they work?
SWIFT (Society for Worldwide Inter-bank Financial Telecommunications), a cooperative non-profit organization, is wholly subordinate to its member banks.
When there is a money transaction between any two international banks, then the SWIFT code is used there. It is an electronic message transfer system that can send the format of the message fixed anywhere in the world during the process of any transaction.
On the other hand, the IFSC Code (IFSC Code) is used when any type of transaction between any banks occurs within the geographical boundaries of India. It is a type of alpha-numeric code, which provides information about the branches of the bank involved in the process of a transaction.
These are both unique identification codes, which are used for any type of digital transaction.
Definition of SWIFT Code
SWIFT (Extension to SWIFT) is called the Society for Worldwide Interbank Financial Telecommunications. This is a unique identification code, which is provided to banks so that they can facilitate the transaction of money internationally. Apart from this, this code is also used by banks while sending messages among themselves.
SWIFT code can be provided to both financial and non-financial institutions. This code consists of 8 or 11 alpha-numeric digits. The following is more information related to this code:
- The first four characters indicate the bank code. (These are all English language letters. For example: AAAA)
- The next two letters indicate the code of the country or nation. (These are also English letters. For example BB)
- The two characters next to it represent the code for that particular location. (Containing first a letter and then a digit. For example 1C)
- The last three letters are optional, indicating the branch of that bank. (Which can be both numerals or letters. For example DDD)
Definition of IFSC Code
Indian Financial System Code, ie IFSC code, is a code based on unique identification. The IFSC Code can be used for any digital transaction in India, whether through National Electric Fund Transfer or through Real Time Gross Settlement. Yes, it is used to get accurate information about the banks and their branches involved in this process.
This code consists of 11 alphanumeric characters, detailed information about which is as follows:
- The first 4 characters indicate the bank code.
- The fifth character is zero (Zero).
- And the remaining 6 characters represent the branch of the bank.
The branches of all banks located within the country are granted IFSC code by the Reserve Bank of India. Using this code, the inter-bank fund transfer system sends a message to other bank-branch to proceed with the process.
Key differences between SWIFT Code and IFSC Code
- The SWIFT code is broadly called the Society for Worldwide Inter-Bank Financial Telecommunication, while the IFSC Code (IFSC Code) is in extension called the Indian Financial System Code.
- SWIFT Code is a globally recognized code, which is used for sending money transactions or related messages between banks internationally. At the same time, the IFSC code is used to know the branches of banks involved in the process of digital money transfer.
- The SWIFT Code has been accredited by the International Organization of Standardization. On the other hand, the IFSC Code has been created by the Reserve Bank of India.
- Only those banks which have been provided SWIFT code can be involved in the international transaction process. On the contrary, all bank branches in India are provided IFSC Code by RBI.
- The SWIFT code consists of 8 or 11 characters in total, while the IFSC Code always contains 11 characters.
- The process fees during international money transfer (SWIFT code) are higher than national transfer (IFSC code).
- We can see any SWIFT code on the official website of that bank, or on the account statement. Whereas to know the IFSC code of a branch of a bank, we have to check its checkbook or we can know it from the official website of Reserve Bank of India (RBI).
Finally, we can say that the basic difference between SWIFT Code and IFSC Code is that we can send and receive money anywhere in the world using SWIFT Code, Whereas by using IFSC Code, we can conduct the transaction of money anywhere within the whole country.