Several Founders, Co-Founders, CXO Bankers, CXO Fintech professional & people who participated in the ePanel discussions:
- Mr. Mayank Baxi, Former AGM The Surat People’s Cooperative Bank Ltd
- Mr. Raghu Veer Dendukuri, Product Owner, Intandemly
- Mr. Taron Mohan, CEO & Promoter, NextGen Telesolutions Pvt Ltd
- Mr. Sachin Nerurkar, MD & CEO at AquaGiraffe Technologies Pvt Ltd
- Mr. Ashvini Kumar Dave, Vice President- Business Solutions Group – Payments
- Ms. Swati Pandey, National Payments Corporation of India
- Vikas R Panditrao, Co-founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
- Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous
One of the community members pointed out a crucial issue about the lack of portability of IFSC code and further opined that IFSC Code Portability should be implemented for sub-member banks.
What is IFSC ? IFSC stands for Indian Financial System Code. IFSC code is vital when it comes to transferring funds through NEFT, RTGS, IMPS, etc. It helps to eliminate any discrepancy which may occur during online fund transfers. One can usually find this code on cheque-book, passbook provided by the bank. The Reserve Bank of India assigns IFSC code to each bank branch.IFSC is an eleven-digit alphanumeric code which is split as follows:
- First four characters: Name of the bank
- Fifth character: Zero (0)
- Last Six characters: Branch code of the bank. This part makes the code unique.
Let’s understand this concept of portability:
- Only scheduled banks have this IFSC code assigned to them by RBI and sub-member banks use the code of their sponsor bank.
- For instance, a sub-member bank of HDFC is been given IFSC code that starts with HDFCxxxxxxx.
- Now if this sub-member bank wants to change sponsor bank from HDFC bank to AXIS or KOTAK, etc they have to change IFSC also instead of portability option being available to sub-member cooperative banks and again a significant question which raises up is that what about cheque clearing which has printed IFSC Code?
- Due to lack of portability sub-member banks are stuck with the current bank that is in the above case HDFC bank.
The following question was raised up another community member- So they can’t move from current bank to another bank? In this question, the problem statement is HDFC to be replaced by Kotak or Axis or some other bank. There is a process to replace the current bank (Sponsor) to another sponsor bank. But, the hitch here is to get NOC from the sponsor bank from where they are shifting to new bank. It was highlighted that Sponsor bank generally doesn’t provide NOC easily, obvious to protect its business. However, this problem can easily be solved by …..
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