In cheques, there is a Magnetic Ink Character Recognition code. This code contains how many digits?

Key Points

• The Magnetic Ink Character Recognition (MICR) code is a 9-digit code.
• MICR code is used mainly by the banking industry to ease the processing and clearance of cheques and other documents.
• The MICR code is printed on the bottom of cheques to enable fast and secure processing.
• The MICR code consists of three parts: the city code, the bank code, and the branch code.

Additional Information

• Magnetic Ink Character Recognition (MICR)
  • MICR is a technology used to verify the legitimacy and enhance the security of paper documents, especially checks.
  • It uses a special ink, which is sensitive to magnetic fields, allowing machines to read and process the information quickly and accurately.
  • The MICR code is typically found at the bottom of a cheque and consists of three sets of numbers: the first set represents the city (city code), the second set the bank (bank code), and the third set the branch (branch code).
  • This technology was introduced in the 1950s and has since become a standard in banking and finance for the efficient processing of cheques.
• Components of MICR Code
  • City Code: The first three digits of the MICR code represent the city code, which is aligned with the PIN code used for postal addresses in India.
  • Bank Code: The next three digits represent the bank code, which identifies the specific bank.
  • Branch Code: The last three digits denote the branch code, identifying the specific branch of the bank.
• Benefits of MICR Code
  • MICR technology ensures accuracy and speed in the processing of cheques, reducing the chances of errors and fraud.
  • It helps in the quick clearance of cheques, enabling faster transactions and efficient banking operations.
  • The use of magnetic ink and characters that can be read by machines enhances security and reduces the risk of forgery.