MICR Full Form

You must know that the full form of MICR is Magnetic Ink Character Recognition. As documents can be forged easily, to avoid such a situation, the technology of MICR was invented. It is used to judge the authenticity of a document with the use of special ink and characters.

Magnetic Ink Character Recognition is referred to as MICR in short.  It is a pattern recognition to identify the originality of the document and enable the processing and cheque approval and other approvals of papers in banking, MICR code is used. It is a technology that uses specific characters and ink.

Characteristics of MICR Code

A MICR code is a nine-digit code that recognizes the bank and branch involved in an ECS (Electronic Clearing System) uniquely. At the base of a cheque leaf next to the cheque number, the MICR code is written. On the very first page of the bank savings account passbook, the MICR code can be found printed.

MICR Code Consists Of Three Parts, they are:

• City Code- The very first three digits of the MICR code represents the Pincode of the city which is the postal code for an address in India.

• Bank Code- The next three digits of the MICR code represents the bank.

• Branch Code- The last three digits of the MICR code represents the branch of the bank.

Working of MICR Method

All About The Technology: 

The MICR technology uses a human-friendly process, where the information is directly scanned and read by the MICR readers into a data collection device. The use of MICR has ensured a more efficient way of document processing.

You must be thinking about how all this works? So, the MICRs work on 2 basic MICR fonts:

• E-13B: it is a set of 14 characters of 10 decimal digits and some special symbols

• CMC-7: It has a barcode format and is made of 15 characters of 10 numeric digits and 5 control characters of internal, terminator, amount, routing, and an unused character in the same order 

Either of the two fonts is printed on documents that need proof of authentication. The fonts are printed using magnetic ink or toner. The ink or toner is specifically made of iron oxide so that the reader can catch it quickly. The documents are passed through the MICR reader, and with the creation of waveforms, the reader reads the characters. 

This form of magnetic scanning ensures an efficient reading of the document is if the printing has been ruined or overprinted.

Where Will You See The Use of MICR?

The major use of MICR is seen in the banking industry. The codes are mainly printed on checks to ensure no forging has been made. You will find a 9 digit MICR code at the bottom of the check, Of these nine digits, the first three-digit indicate the city code, the next three represent the bank code, and the last three refers to the branch code. 

The Alluring Features of the MICR

The MICR has come as a boon for the bankers. Previously it was a manual job to identify the authentication, but with the discovery of the MICR, the job has become quick and efficient.

• The MICR codes can be read in any situation, even if the codes have been signed or stamped over.

• It ensures security

• Error-free work is the highest USP of the MICR

• The MICR codes with errors are immediately rejected, and the ink used is of high and expensive quality. This ensures that the codes are not forges.

A Brief to the Origin of the MICR

In an attempt to create ways to reduce the manual effort and eliminate the chances of error, the General Electric Computer Laboratory, along with the Stanford Research Institute, came up with the first MICR automated system to process cheques by the mid-1950s. They also came up with the E-13B font system.  

In 1957, in France, the Groupe Bull created the CMC 7 font that has been adopted by many European countries.

So, let us raise our glasses to the invention of a technology that eased our ways.

MICR code can be displayed in two formats on the paper. One is the CMC-7 and the other is E-13B. In the printing process of the MICR code magnetic ink is being used. The MICR code is then moved from the MICR reader, which enables proper reading of the characters that have been blurred by signatures and stamp marks.

When claiming various types of financial transactions, such as investment types or SIP forms, or when sending money, one should notice the MICR code.

Features of MICR Code

• It is easily recognizable, even if there is any stamp or sign over it. Therefore, it is beneficial. 

• It generates a very safe and secure network as it is hard to track the same ink, which makes forging the document very complicated.

• Forging cannot be done because a similar kind of ink used in MICR is hard to track, thus providing a secured network. 

• This reduces the error rate as well.

• MICR fonts which do not meet these criteria are either rejected or not approved.

IFSC Code vs MICR Code

The fundamental and main difference between the IFSC code and MICR code is that the IFSC Code is used to send money via NEFT and RTGS. Whereas, the MICR code is used exclusively on the printed cheque leaves.

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