MICR on your cheques

              

The MICR code is a 9 digit code, which is printed at the bottom of a cheque. The composition of the MICR code is as follows:
A MICR code is unique to each bank branch. Thus, a MICR code can be used to uniquely identify any bank branch.
It comprises of 3 parts:
1. The first three digits represent the city (City Code). They are aligned with the PIN code we use for postal addresses in India.
2. The next 3 digits represent the bank (Bank Code)
3. The last 3 digits represent the branch (Branch Code)
Example 1
Let’s say you have an account in the Andheri (West), Mumbai branch of State Bank of India (SBI). What would be its MICR code?
City code for Mumbai: 400
Bank code for SBI: 002
Branch code for Andheri (West): 003
Hence the MICR code is: 400002003
Example 2
Say you have an account in the Indira Nagar, Bangalore branch of ICICI Bank.
City code for Bangalore: 560
Bank code for ICICI Bank: 229
Branch code for Indira Nagar: 013
Hence the MICR code is: 560229013

If you have the MICR code, you can find out the bank name, branch and city by just reversing the process!

How a MICR code makes cheque processing faster?

As we saw, MICR stands for “Magnetic Ink Character Recognition”. Thus, it is actually the name of the technology using which the code is printed. And therefore, the code is known as MICR code.

So, how does this MICR technology work, and how does it help?

On the cheque, the MICR code is printed using a special kind of ink or toner – an ink that contains magnetic material (usually iron oxide). The code is also printed using a specific font. This ink is machine-readable due to the presence of the magnetic material (just like the strip at the back of a credit or debit card). When the cheque is inserted in a reading machine or a cheque sorting machine, it can read the MICR code even if there are other marks or stamps on it. Thus, the machine can easily find out which branch the cheque belongs to. This helps a lot in automating the cheque clearing process. And since this is automated, there is little possibility of any error! Hence Cheques get cleared faster, and you get your funds earlier!

Want to know the MICR code of a particular bank branch?
Download the spread-sheet containing the MICR codes of ALL bank branches in India fromhttp://rbidocs.rbi.org.in/rdocs/content/docs/67440.xls