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Important Codes & Types of Banking

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Title: Important Codes & Types of Banking


1
Important Codes Types of Banking
2
Important Codes Types of Banking
  • Codes like IFSC, MICR and SWIFT are very much
    useful to identify any bank branch in India that
    participates in NEFT, Electronic clearing scheme
    for inter-bank communication purpose to convey
    important messages to other banks.
  • There are different types of banking to carry out
    different functions in the bank according to the
    need of the customers.
  • Let us discuss them in detail

3
Important Codes Types of Banking
  • IFSC (Indian Financial System Code)
  • Indian Financial System Code (IFSC) is an
    alpha-numeric code that uniquely identifies a
    bank-branch present in our country.
  • It is an 11 digit code with the
  • First 4 alpha characters representing the bank
  • The 5th character is 0 (zero)
  • The last 6 characters representing the particular
    bank branch.
  • For example - PNBN0014872
  • First 4 characters PNBN refers to Punjab National
    Bank.
  • 0 is a control number.
  • Last six characters (014872) represent the
    particular branch.

4
Important Codes Types of Banking
  • MICR Magnetic Ink Character Recognition
  • MICR is a 9-digit numeric code that uniquely
    identifies a bank branch participating in
    electronic clearing scheme.
  • It is used to identify the location of a bank
    branch.
  • First 3 characters refer to the City
  • Next 3characters represent the Bank
  • Last 3 characters refer to the Branch
  • It is allotted to a bank branch is printed on
    the MICR band of cheques. MICR is used for
    electronic clearing of cheques.

5
Important Codes Types of Banking
  • SWIFT Code Society for Worldwide Interbank
    Financial Telecommunication
  • India was the 74th Nation to join the SWIFT
    Network.
  • SWIFT Code is a standard format of Bank
    Identifier code.
  • This code is used particularly for interbank
    transfer of money between banks majority of
    FOREX related message are sent to correspondent
    banks abroad with the help of SWIFT code.
  • SWIFT Code consists 8 or 11 character when the
    code is 8 digits, it refers to the primary
    office.
  • 4 digits Bank code
  • 2 digits Country code
  • 2 digits Location code
  • 3 digits Branch code (optional)

6
Important Codes Types of Banking
  • Types of Banking
  • Para banking- When Bank provides banking services
    except the general banking facility is known as
    Para banking.
  •  
  • Offshore Banking- Banks which accepts currencies
    of all other countries. This type of banking is
    known as Offshore Banking.
  •  
  • Retail Banking- Retail banking is banking in
    which division of a bank directly deals with
    retail customers.

7
Important Codes Types of Banking
  • Wholesale banking-Wholesale banking includes the
    services provided by banks to organizations such
    as large corporate clients, mid-sized companies,
    real estate developers investors, international
    trade finance businesses etc.
  • Narrow Banking- When banks invest its money in
    Govt. securities instead of investing in share
    market to avoid risk is known as Narrow Banking.
  • Green bankingThe concept of Green Banking was
    introduced to promote environmental-friendly
    practices reducing the carbon footprint from day
    to day banking services.

8
Important Codes Types of Banking
  • Universal BankingThe concept of Universal
    Banking was recommended by H Khan Committee which
    allows financial institutions to undertake all
    types of banking or development financing
    activity in compliance with RBI, Govt. related
    legal Acts.
  • Islamic Banking The concept of Islamic Banking
    is new in India. Islamic bank is a
    deposit-accepting banking institution whose scope
    of activities excludes borrowing lending money
    on interest.
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