MICR FULL FORM
Introduction:
“MICR is abbreviated as Magnetic Ink Character Recognition.”
Understanding that MICR stands for Magnetic Ink Character Recognition is essential. Since documents can be readily forged, MICR technology was developed to prevent this kind of circumstance. Using unique ink as well as characters, it is utilized to assess a document's legitimacy.
MICR code is utilized in recognition of patterns to determine the originality of the document as well as facilitate processing, check approval, along with different paper approvals in banking. It's a technology that makes use of certain ink and characters.
Features of the MICR Code:
An ECS (Electronic Clearing System) bank as well as branch can be uniquely identified by their nine-digit MICR code. The MICR code is inscribed at the base of the cheque leaf, afterwards to the cheque number. The MICR code is displayed on the primary page of the bank's account's savings passbook.
Components of MICR code
The three components of the MICR code are as follows:
- City Code: The Pincode of the city, or the postal code representing an address in India, is denoted by the primary three digits of its MICR code.
- Bank Code: The bank is indicated by the following three digits in its MICR code.
- Branch Code: The bank's branch is indicated by the remaining three digits of its MICR code.
Working of MICR method
Technology Overview:
The MICR’s data is instantly scanned and read through the readers directly into a data-gathering device using the user-friendly MICR technology. Document processing is now more effective because to the usage of MICR.
I'm sure you're wondering how this all works. Thus, the MICRs are compatible with the following two fundamental MICR fonts:
- E-13B: It is a group of 14 characters that include some unique symbols as well as 10 decimal places.
- CMC-7: 15 characters total consists of 10 numeric digits followed by 5 control characters of internal, terminator, routing, amount, along with an unused character within the exact same order make up this barcode format.
Documents requiring verification of authenticity are printed in one of the two fonts. Toner or magnetic ink are used for printing the fonts. To ensure that the reader notices it right away, iron oxide is utilized specifically to make the toner or ink. The documents are fed via the MICR reader, which analyses the characters by generating waveforms.
In the event that the printing is damaged or overprinted, this type of magnetic scanning guarantees an accurate reading of the document.
Where Do You See MICR Being Used?
The banking sector is the primary user of the MICR technology. Mostly, the codes are printed on cheques to make sure they haven't been forged. The cheque has a nine-digit MICR code on the bottom. The initial three of these numbers are the branch code, the following three are the bank code, and then the final three are the city code.
The MICR's Alluring Features:
- The bankers have benefited greatly from the MICR. Identification of the authentication was once a manual task, but since the MICR was discovered, the process has become rapid and effective.
- Despite the fact that the MICR codes were originally signed or stamped over, they can still be read in any circumstance.
- It guarantees safety.
- Work devoid of errors is the MICR's greatest USP.
- Error-ridden MICR codes are rejected right away, and expensive, premium ink is used. This guarantees that the codes are authentic.
History of MICR's technology
By the middle of the 1950s, the General Electric Computer Laboratory, as well as the Stanford Research Institute, had developed the first MICR automated cheque processing system in an effort to decrease manual labour and remove the possibility of error. The E-13B font style was also developed by them.
The CMC 7 font was developed in 1957 in France via the Groupe Bull and is now used in several European nations.
So, let's toast to the development of technology that has made our lives easier.
In the paper, the MICR code might be shown in two different ways. The CMC-7 is one, whereas the E-13B is the other. Magnetic ink is utilized during the MICR code printing procedure. After that, the MICR code is removed from the MICR reader, allowing the characters that are blurry by stamps and signatures to be properly read.
The MICR code must be noted while claiming different financial transactions, like investment kinds or SIP forms, or while sending money.
Key Features of MICR Code
The MICR Code has various features, including:
- It is immediately identifiable, even with a sign or stamp covering it. It is advantageous as a result.
- Due to the difficulty of tracking the same ink, it creates a highly secure and safe network as well as making document forgery extremely difficult.
- Because the type of ink utilized by MICR is difficult to trace, forging is not possible, resulting in a secure network.
- Additionally, this decreases the error rate.
- MICR fonts that don't fit these requirements are either turned down or left unapproved.
MICR Code vs. IFSC Code:
The primary and essential distinction among the MICR and IFSC codes is that the former is utilized for RTGS along with NEFT money transfers. With the printed cheque leaves, however, only the MICR code is utilized.
Conclusion
A bank's information package, web page, or mobile banking application all have a specific function and are utilized by the bank as well as its customers to record and then expedite transactions. Further, Banks provide the dame data through different online platforms unlike, websites, banking kits, as well as mobile apps to simplify the financial transactions for their customers.