Centralized Funds Management System in India

CFMS - Quick Overview

Introduction: 

• CFMS was operated and maintained by RBI to enable operations on current accounts maintained at various offices of the RBI, through standard massage formats in a secure manner. 
• From 1st January, 2013 the funds transfer through CFMS has been discontinued with effect. 

Routing Codes in Indian Banking System: 

Payment system environment in India has been developed in a system from a paper-based system where multiple electronic systems co-exist. Banks and customers use multiple existing routing codes in the system. These include – 

1. Magnetic Ink Character Recognition (MICR) Code 
2. Indian Fiscal System Code (IFSC) 
3. Society for Worldwide Inter-bank Financial Telecommunication (SWIFT) 

Magnetic Ink Character Recognition (MICR) Code: 

In 1986, MICR technology-based mechanized clearing systems was introduced. As the basis for clearing it introduce MICR code parameters on cheques. It requires allocations in the branches of the MICR code, which is encoded on every cheque given by a participating branch of MICR clearing, which manages large cheques. The MICR code structure is as under –

***	***	***
City Code	Bank Code	Branch Code

Indian Fiscal System Code (IFSC): 

IFSC is an 11-digit alpha-numeric code that is followed for Society for Worldwide Inter-bank Financial Telecommunication (SWIFT). The IFSC format is as under –

****	0	******
(Bank Identifier) [Example – RBIS]	Zero#	(Branch Identifier) [Example - AHPA01]

# (retained zero for future use) 

• The first 4 digit identify the bank. Fifth (5th) is numeric and last Six (6) character identify the bank branch. The codes conform to the SWIFT BIC Code. RTGS and NEFT work on the basis of IFSC. 

Society for Worldwide Inter-bank Financial Telecommunication (SWIFT) Branch Identifier Code: 

Bank Swift Code is a unique form of Bank Identifier Code (BIC). It is unique to each bank. These codes are used when money transfer and news between banks. The SWIFT code forms of 8 or 11 character. In the primary office 8-digit code will be given. 

1. First 4-characters – Bank Code. 
2. Next 2-character – Country code. 
3. Next 2-character – Location Code 
4. Last 3- character – Branch Code 

Volunteer for frequent transactions are not working in India, so BICT is not used individually on the transaction street. 

International Bank Account Number (IBAN): 

An International Standard for Bank Account Identification across IBAN National Bound. It helps domestic or cross border through inter-bank electronic payments and direct processing. 

IBAN mainly formation of 2 parts – 

1. The first part form of Country Code, Check Digit and Bank ID. 
2. Second part consists of Basic Bank Account Number (BBAN) decided by banks (up to 26 character); maximum 34 digit.