The MICR full form is Magnetic Ink Character Recognition.
MICR is a technology used primarily by the banking industry to automate the processing of checks and other documents. It involves printing characters using magnetic ink, which can then be read by specialized machines. The MICR code typically includes information such as the bank's routing number, the account number, and the check number.
Here's a breakdown of why MICR is important:
- Automation: MICR allows for automated processing of checks, reducing manual handling and errors.
- Security: The magnetic ink is difficult to counterfeit, providing a level of security against fraudulent checks.
- Efficiency: It speeds up the check clearing process, making funds available to depositors more quickly.
- Accuracy: MICR readers are highly accurate, minimizing errors in data entry.
In India, the Reserve Bank of India (RBI) assigns a unique nine-digit MICR code to each bank branch participating in the ECS (Electronic Clearing Service) Credit scheme. This code helps in identifying the bank and branch during electronic fund transfers.
