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IFSC, MICR & Cheques

Banking / Economy Awareness · Payments & Financial Infrastructure

Overview

Branch codes identify banks for electronic and cheque clearing; cheques are negotiable instruments with fixed validity and rules.

Key points

IFSC has 11 characters: 4 letters for the bank, a 0, and 6 characters for the branch.
MICR code has 9 digits: city (3), bank (3), branch (3).
A cheque is valid for 3 months from its date.
An account-payee crossed cheque can be credited only to the payee’s account.
Dishonour of a cheque for insufficient funds is an offence under Section 138 of the Negotiable Instruments Act, 1881.

Explanation

Bearer cheques can be paid to whoever presents them; order cheques to the named person or as endorsed.
Cheque Truncation System clears cheques using images.
Positive Pay System re-confirms key details of high-value cheques (₹50,000 and above).
A stale cheque is one presented after its validity period.

Step by step

Identify the institution, rule or instrument asked.
Recall its definition, year, limit or function from a table.
Eliminate options from similar institutions or older rules.

Examples

Number of characters in an IFSC → 11.
Number of digits in a MICR code → 9.
Validity of a cheque → 3 months.

Traps and advanced points

Trap: Giving IFSC 9 characters.
Trap: Thinking a crossed cheque can be cashed at the counter.
Trap: Using 6 months validity.

Quick revision

IFSC 11, MICR 9.
3 months validity.
Sec 138 NI Act.

Practice MCQs

An IFSC has how many characters?
1. 9
2. 10
3. 11
4. 12
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Answer: (c) 11. 11.
The fifth character of an IFSC is —
1. the branch code
2. 0
3. 1
4. A
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Answer: (b) 0. Reserved 0.
A MICR code has how many digits?
1. 6
2. 9
3. 11
4. 12
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Answer: (b) 9. 9.
The first three digits of MICR identify the —
1. branch
2. account
3. city
4. bank
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Answer: (c) city. City, bank, branch.
A cheque is valid for —
1. 1 month
2. 3 months
3. 6 months
4. 1 year
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Answer: (b) 3 months. 3 months.
An account-payee crossed cheque can be —
1. transferred by endorsement freely
2. encashed by anyone
3. credited only to the payee’s account
4. used as cash
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Answer: (c) credited only to the payee’s account. Payee only.
Cheque dishonour for insufficient funds is an offence under Section —
1. 12 of PMLA
2. 138 of the NI Act
3. 420 IPC
4. 24 of RBI Act
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Answer: (b) 138 of the NI Act. NI Act s.138.
The first four letters of an IFSC identify the —
1. state
2. bank
3. city
4. branch
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Answer: (b) bank. Bank code.
IFSC is used for —
1. cheque printing only
2. tax filing
3. insurance
4. electronic fund transfers
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Answer: (d) electronic fund transfers. NEFT/RTGS/IMPS.
MICR codes are used mainly for —
1. insurance claims
2. cheque processing
3. UPI
4. card payments
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Answer: (b) cheque processing. Cheque clearing.