What is MICR Code on Cheque, and How to Find It?

In the banking industry, MICR codes are vital in speeding up cheque processing while ensuring security. Understanding this MICR code classifies as an important cheque feature and ensures accurate cheque processing and transactions.

Read along to learn more about the MICR code on the chequebook, the format of MICR, its uses and benefits and much more.

What is MICR Code in Cheque?

MICR (Magnetic Ink Character Recognition) is a technology that is used to identify magnetic ink characters printed on cheques. The MICR code is a 9-digit number located at the bottom of every cheque leaf that helps validate transaction authenticity.

Every bank has a unique MICR code, which is found on every cheque leaves in the chequebook issued by the bank. Besides the cheque leaves, you can also find a branch's MICR code on its official website.

The Reserve Bank of India introduced this MICR code to improve efficiency and safety while processing cheque payments. This technology allows banks to quickly identify branches, speeding up the entire cheque clearance process.

Format of MICR Code on Cheque Leaf

All bank branches are assigned a unique MICR code to distinguish themselves from other financial institutions. This 9-digit number follows a particular format and can be divided into three parts, which are as follows:

• City code: The first three digits of the MICR code indicate the city.
• Bank code: The fourth, fifth and sixth digit represents the bank code.
• Branch code: The last three digits represent the specific branch code.

MICR Code Example

Now that you know the format of MICR codes, let us understand how it works using a simple example.

The MICR code of ICICI Bank Kolkata Alipore branch is 700229021. 

• The first three digits are 700, which is the city code; here, it represents Kolkata.
• The next three digits are 229, which is the code for ICICI Bank; it is the same for all ICICI Bank branches across our country.
• The last three digits are 021, which is the branch code. It is specifically assigned to the ICICI Bank Kolkata Alipore branch.

How to Find MICR Code on Cheque?

Your chequebook comprises a bunch of cheque leaves. The MICR code is located at the bottom of each cheque leaf. However, be aware that this MICR number is located adjacent to the cheque number, which is a 6-digit number, while MICR is a 9-digit number. Moreover, you can also find your MICR code on the first page of your bank passbook.

Uses & Benefits of MICR Code in Cheques

Here are some notable benefits and uses of MICR code in cheques:

• Cheque clearance

MICR code speeds up the cheque cleaning process by providing accurate branch and bank identification. It also performs the functions of a barcode in Electronic Clearing System (ECS) credit transactions. It is also useful for verification during loan disbursement and while investing in mutual funds, SIPs or other financial instruments.

• Fast processing

Quick scanning and processing of cheques are allowed through a MICR code, enhancing the overall processing speed with minimal human errors.

• Security

MICR codes are printed by magnetic ink on cheques. Each branch of the bank is assigned with a separate code. Thus, it makes a cheque highly secure, thereby leaving fewer scope of fraudulent acts.

• Accuracy

It automates the cheque verification process, eliminating the need for manual verification. This minimises human errors and ensures that details are recorded accurately.

• Standardisation

The entire banking industry has adopted the MICR, a standardised technology. It aims to achieve uniformity in across various banks and financial institutions allowing different entities to process cheques in a seamless manner.

The MICR code on a cheque is a 9-digit number printed on cheque leaves that facilitates the quick validation and processing of cheques. It is one of the most vital cheque validation technologies standardised across the industry and minimises human errors.

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