MICR : Magnetic Ink Character Recognition : Magnetic Ink Character Recognition, or MICR, is a character recognition technology used primarily by the banking industry to facilitate the processing of cheques.
MICR characters are printed in special typefaces with a magnetic ink or toner, usually containing iron oxide. A special machine is used to read these characters, which can be easily read by humans too. The characters are usually printed on the bottom strip of cheque leaf.
This MICR code is used By RBI (Reserve bank Of India) clearing process to identify the branch and bank for clearing processes.
See Blow Image (Cheque) :
Nine Digits after Cheque number is MICR Code.
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Magnetic ink character recognition or MICR comprises nine digits, which are further sub-divided as city, bank and branch code. It works the same way as your home or office address, enabling your snail mail to reach you from far-flung places. But unlike your addresses, the banking address is all numerical, where:
For example, if you have an account with State Bank of India (SBI) Mumbai (Central) then its nine digit MICR code will be 123456789 where in:
123 : the first three digits representing the city code for Mumbai,
456 : the next three digits representing the bank code for SBI,
789 : the last three digits representing the bank branch code for Andheri (West).
Many of you would have seen the magnetic inks bar codes printed on the bottom of your bank’s cheque leaves. These bar codes are known as MICR code, an abbreviation for “Magnetic Ink Character Recognition”. Actually, the MICR is the name given to the technology used in printing the code.
In the early 1980s the Reserve Bank of India (RBI) introduced many new modes for safe and effective payments across the country. One such important mode introduced was the unique system of MICR based cheque clearing system.
Apart from being a security bar code to protect your transaction, the MICR code is also an indispensable part for online money transfers. Every bank branch is given a unique MICR code and this helps the RBI to identify the bank branch and speed up the clearing process.
All banks have their specific MICR codes that indicate many things about a particular banking operation. All third party transactions and processing of any such kind can’t be possible without MICR code. That is why MICRocode is considered so important in the banking transactions. If you are willing to know more then check MICR code India and have detailed information. The main role of MICR codes has to be understood for all types of financial transactions done from one bank to the other.
A bank indicates its MICR code for the account holders by printing it on the check leaves. The bottom of the check carries the MICRocode of the bank so that one can trace it as and when used. The role of MICR code India in linking all the banks on different grounds is much important to know. The digit classification of MICR codes of all the Indian banks are same and uniquely adjusted.