Difference Between Swift Code and IFSC Code

In banking parlance, terms such as IFSC and Swift Code are used fairly frequently; however, the concepts that differ in use, scope, and the institutions that issue them. To put it simply, an IFSC Code facilitates the smooth and hassle-free functioning of deposits and/or withdrawal-related processes within financial institutions. A Swift Code, on the other hand, is assigned to a particular bank by the Society for Worldwide Interbank Financial Telecommunication, abbreviated as S.W.I.F.T. These codes act exactly like an IFSC code, except in the case of Swift Codes, they are assigned to financial institutions all across the globe and facilitate monetary transfers between them. Given its scope, the same is used for sending or receiving money from financial institutions that reside in two separate countries.

 

But, before we talk about the differences between IFSC and Swift codes, it is important to go over these terminologies so that your memory is refreshed. We will start with the concept of the Swift Code along with its uses and then do the same for IFSC codes. Read on to know more.

As mentioned previously, a Swift code is assigned to a particular banking or financial institution by the Society for Worldwide Interbank Financial Telecommunication (S.W.I.F.T), S.W.I.F.T is an international organisation that helps institutions worldwide receive information related to financial transactions with ease.

Swift codes function almost exactly like IFSC codes, except the former is used when an individual has to send money to the people who live across country borders. In terms of their formation as well, there could be instances where a Swift code can have the exact same length as an IFSC Code as it can be anywhere between 8-11 characters long. But, the information that the components of a Swift code hold within themselves are a little different from that of an IFSC Code, given that the former is used to make transactions globally.

 

Now that you have understood what a Swift Code is and what are its uses, it is time to reacquaint you with the concept of the IFSC Code Details pertaining to the same, such as the places where it can be found and what it is specifically used for will also be shared through the paragraph that follows. Let us take a dive into it right away.

An Indian Financial System Code (IFSC) is a distinctive 11-digit alphanumeric figure that is needed for financial transactions through means such as RTGS, NEFT, and IMPS. IFSC Codes are allotted by the Reserve Bank of India to all the banks that have their operations set up in India, with every branch being allotted their own unique IFSC Code. The IFSC codes are typically printed on documents essential for banking transactions such as the cheque book and the account holder’s passbook, amongst others. The same can also be found on the Reserve Bank of India’s official website by those who have details pertaining to the location of the bank they want to interact with but do not have its IFSC code. An IFSC code is also essential for those who want to perform all kinds of financial transactions digitally, with the exception of that of UPI-based payments.

When initiating an electronic fund transfer, the payer has to fill in the details pertaining to the payee such as the name of their bank, the location of their branch, their account number and then lastly, the previously-mentioned IFSC code of bank of the payee. Once this particular step has been completed, the funds that have been transferred will find a way to the account of the payee without any hassle and in a short span of time. Essentially, what an IFSC Code does is that it helps in making sure that the right payee receives the funds that they are due.

 

In order to provide a summation of all of the information that has been provided in the above paragraphs, a table which points out the distinctions between an IFSC Code and a Swift Code has been created. You can find the same below.

 

If you would like to learn more about concepts such as Swift Codes, IFSC Codes and their respective uses, you can always educate yourself through Bajaj Markets.