Difference between SWIFT Code and IFSC Code

SWIFT code and IFSC code are two important terms related to the banking sector. To transfer funds between banks, the SWIFT code and the IFSC code play a crucial role. However, these two codes are used in transferring funds, there are some differences between the SWIFT code and the IFSC code.

What is SWIFT code?

A SWIFT code, also known as a Bank Identifier Code (BIC), is a unique identification code for a particular bank. It stands for Society for Worldwide Interbank Financial Telecommunication. SWIFT codes are used when transferring money between banks, particularly for international wire transfers. Each bank has its own SWIFT code, which consists of either 8 or 11 characters. The code provides information about the bank and its location. The first four characters represent the bank code, the next two characters represent the country code, the following two characters represent the location code, and the last three characters (optional) represent the branch code. SWIFT codes help ensure that transfers are directed to the correct bank and branch.

Key characteristics of SWIFT Code:

• Unique Identification: Each SWIFT code is unique to a specific bank and its branch, helping to ensure accurate routing of financial transactions.
• International Usage: SWIFT codes are used primarily for international transactions, facilitating communication between different financial institutions across the globe.
• Standardized Format: SWIFT codes follow a standardized format of either 8 or 11 characters, with each character serving a specific purpose to identify the bank, country, location, and branch.

What is IFSC code?

An IFSC (Indian Financial System Code) code is a unique identification code assigned to each branch of banks in India that participate in the electronic funds transfer network. It is used for facilitating electronic money transfers within India. The Reserve Bank of India (RBI) assigns IFSC codes to banks and their respective branches.

Key characteristics of IFSC code:

• Unique Identification: Each bank branch in India has its own unique IFSC code, which helps in identifying the bank and branch involved in a transaction.
• Standardized Format: IFSC codes follow a standardized format of 11 alphanumeric characters. The first four characters represent the bank code, the fifth character is always ‘0’ (zero) and is reserved for future use, and the last six characters represent the specific branch code.
• Facilitation of Electronic Transactions: IFSC codes are primarily used for facilitating electronic funds transfers within India, including transactions through NEFT (National Electronic Funds Transfer), RTGS (Real Time Gross Settlement), and IMPS (Immediate Payment Service).

Difference between SWIFT Code and IFSC Code

Basis	SWIFT Code	IFSC Code
Meaning	A SWIFT code, also known as a Bank Identifier Code (BIC), is a unique identification code for a particular bank.	An IFSC (Indian Financial System Code) code is a unique identification code assigned to each branch of banks in India that participate in the electronic funds transfer network.
Purpose	It is used to initiate and transfer money in a secure way across various countries.	It is used to initiate and transfer money securely within India.
Location	The SWIFT code is used internationally across various countries.	The IFSC code is used in India only.
Full Form	The full form of the SWIFT code is Society for Worldwide Interbank Financial Telecommunication.	The full form of the IFSC code is the Indian Financial System Code.
Issued and Managed By	SWIFT code is issued by the Society for Worldwide Interbank Financial Telecommunication network.	IFSC code is issued and managed by the RBI.
Used by	SWIFT codes are used by Banks, financial institutions, and regulatory authorities. Not by the individuals.	IFSC codes are used by banks, individuals, and businesses.
Currency	By using SWIFT code, foreign currency and cross-border payments can be made.	By using the IFSC code, only Indian rupees (INR) can be transferred within India.

Conclusion

SWIFT code and IFSC code are both very useful in terms of secure fund transfers. The SWIFT code is used for international transactions such as international trade, commerce, and financial transactions. On the other hand, the IFSC code is widely used in India for domestic transactions such as bill payments, money transfers to recipient bank branches etc. The IFSC code is issued and managed by the RBI.

SWIFT Code and IFSC Code – FAQs

Is the SWIFT code and the IFSC code the same?

No, SWIFT code and IFSC code are not the same. The SWIFT code is used for international transactions across various countries, and the IFSC code is used for domestic transactions within India.

How can I find my SWIFT code?

SWIFT code can be located in the banking statements/account details or in online directories. It can also be obtained from the databases that are provided by the regulatory authorities.

What is an example of a SWIFT code?

An example or format of a SWIFT code is XXXX-YY-ZZ-123.

Here,

• ‘XXXX’ represents the title of the bank in short form.
• ‘YY’ represents the country code.
• ‘ZZ’ represents the location of the bank’s headquarters.
• ‘123’ represents the branch of the bank.

What do you mean by IFSC code?

The IFSC code is an important term that is frequently used for domestic fund transfers within India. The Indian Financial System Code is the full form of the IFSC code. It consists of 11 unique alphanumeric characters that represent the bank code, branch code, etc.

What is the full form of the SWIFT code?

The full form of the SWIFT code is Society for Worldwide Interbank Financial Telecommunication.

What is the full form of the IFSC code?

The full form of the IFSC code is the Indian Financial System Code.