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Decoding the MICR code in cheque

If we will go back to 10 – 15 years back almost every day in news paper we used to get one column that there has been a bank fraud by producing forged bank DD and cheque. In fact the number of this incident grew up day by day. The only reason behind the forgery is due to the lack of some important security features with the bank instrument.  This has forced the whole banking industries to chalk out a plan and to develop such security features for the banking instruments where the number of frauds will be minimize.

History of MICR:

After a long research and discussion the RBIU has come out with a plan and concept of MICR in the year 19880 for the cheques. For each and every cheque there will be separate MICR code and it will help to process the cheque faster and to minimize the fraud. Since then every bank has implemented the concept and the bank started issuing cheques with the feature of MICR to all its customer. After the implementation of the MICR code the number of fraud has gone down and in fact after some days it become nil. At the same time the banking industries has also got another advantage of fast processing. Due to the implementation of the MICR code the cheques used to clear faster and the fund transfer has also become very easier.

What you will found inMICR:

The MICR stands for Magnetic Ink Character Recognition. The MICR code is a combination of 9 digits and it is used to appear at the bottom of the cheque book. Generally t he MICR code comes just after the cheque number and from the MICR it is easy to identify the  drawer of the cheque.
XXX – XXX – XXX

Out of the nine digit it has been segregated into 3 section of 3 character each.

The first 3 character represents the city from which the cheques has been issued. And the city name is represented in the form of PIN number of the city. Lets have an example, a cheque is issued at Hyderabad Madhapur and the PIN number is 500081. So the first three digit of the MICR code will be 500.

The next three character represent the bank code. The bank code will be issued by the RBI and RBI will issues different code to different bank. For example if it is SBI the code will be 002 and so and for other banks as well.   

The last three character represent the branch code or the branch SOL id of the particular bank. Ever bank assign SOL or Branch number to its branches and the SOL number will be the last three digit of the MICR code.

In fact over the internet there are several sites where you can get your MICR code, take the help of internet and get the MICR code.