Magnetic Ink Character Recognition Code MICR Code in Details
What is MICR Code?
Magnetic Ink Character Recognition (MICR) is a technology used in banking to speed up and secure the processing of checks and other documents. The MICR code is a unique 9-digit code that helps in identifying the bank and branch where the account is held.
Structure of MICR Code
1. City Code (First 3 Digits): Represents the city where the bank branch is located.
2. Bank Code (Next 3 Digits): Identifies the specific bank.
3. Branch Code (Last 3 Digits): Refers to the specific branch of the bank.
Example: In the MICR code 110002234:
`110` is the City Code (e.g. Delhi)
`002` is the Bank Code (e.g. Bank of India)
`234` is the Branch Code
Why is MICR Code Important?
1. Faster Check Processing: MICR codes speed up the clearing process by allowing automatic reading of checks.
2. Accuracy: The use of magnetic ink and a unique font ensures that the code is read accurately reducing errors.
3. Security: The code's design and the use of magnetic ink make it difficult to forge or alter.
Uses of MICR Code
Check Processing: Ensures checks are routed to the correct branch for quick clearance.
Electronic Transactions: Required for NEFT RTGS and other electronic fund transfers.
Conclusion
The MICR code is crucial for fast secure and accurate banking transactions making it an essential tool in modern banking.
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