What is MICR Code

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MICR is the short form of Magnetic Ink Character Recognition. It is a code located at the bottom of the cheque which is known as MICR line. It is a nine digit numeric code printed in magnetic ink. With the help of MICR code, we can identify the bank and the branch. The MICR code is also printed on the first page of bank account book.

Where is MICR code on cheque:

Usually MICR code is placed at the bottom of the cheque. The ink used to print the code is made of iron oxide.

These codes can be easily readable by humans. Usually two types of MICR fonts are being used.They are CMC7 and E13B. The font widely used for the code is the standard E13B which has special shaped characters. It contains not only numbers but also symbols. These characters can be read at high speed. It is the most common font used to print the MICR code worldwide. The MICR texts can be read by the MICR reader.

And the characters of MICR are added to a standard called Unicode.

When a cheque is passed to the MICR reader, the magnetic ink characters in the cheque produce a unique waveform for every character which can be recognized by the reader.

When a cheque is placed in the reader, MICR code can be easily readable even it is overprinted or having any other pen marks or stamps on it. Thus, the error rate by this code is very minimal.

The processing time of cheques before the introduction of MICR is vast. RBI introduced many safe methods for the transaction in 1980s. MICR code usage is one such safe and quick method to clear transactions. This MICR had been accepted by many countries in the world.

MICR Code has 9 digits of numerical value which represents respectively the city code, bank code and branch code.

First three digits represent the city where the bank branch located, and it is related to the pin code of that area.

The next three digits denote the bank code.

And the last three digits denote the code of the bank branch where the account is maintained.

For example, let’s take the MICR code of Indian Bank, Goregaon East branch located in Mumbai which is 400019074.

• The first three digits, 400 meant Mumbai, which is the city of the bank located.
• The next three digits, 019 represents the particular bank code (Indian bank) that it identifies the bank.
• And the last three digits, 074 represents the branch code that it says the branch of the bank (Goregaon East Indian bank branch).

Here is the list of MICR Code.

MICR Code in banking:

Each and every branch has a unique MICR code and the code is printed in cheques at the bottom, after the cheque number. By using MICR code, possibility of error during a process is eliminated and the bank branch can be easily identified with this code. Speeding up of the clearing process of cheques in banks and in RBIcan be done quickly with MICR cheque processing centers.

MICR code is one of the main factors in Cheque Truncation System (CTS) by which the cheques are processed. Here the electronic image of cheque is used instead of physical ones. Due to the CTS system and with the help of MICR code, time taken for the cheque clearances reduced.

Some of the financial transactions require this MICR code. It is different from the IFSC code. As the MICR code is much useful for the clearing processes, it became mandatory to mention it on the bank account book and in bank statements.