MICR: Full Form, Example, Uses, Importance & Where to find it?

MICR

MICR Full Form: Magnetic Ink Character Recognition

Key Highlights

MICR is a technology in banking that helps in verifying the authenticity and processing of cheques efficiently.
It is a special ink and character recognition system, which reads and processes cheques fast and securely.
The MICR code is a unique 9-digit code printed on the bottom of every cheque in India.

What is MICR?

MICR is a technology in banking that helps in verifying the authenticity and processing of cheques efficiently. It is a special ink and character recognition system, which reads and processes cheques fast and securely. The MICR code is a unique 9-digit code printed on the bottom of every cheque in India.

What does MICR Stand For?

Magnetic Ink: The ink used contains magnetic particles, enabling machine readability.
Character recognition refers to the system that can read and decode the printed characters.

Components of a MICR Code

The 9-digit MICR code is divided into three parts:

City Code: The first 3 digits represent the city (aligned with the PIN code).
Bank Code: The next 3 digits signify the bank.
Branch Code: The last 3 digits denote the specific branch.

For example, if the MICR code is 400002051:

400: Mumbai (city)
002: Bank code
051: Branch code

Uses of MICR

1. Cheque Clearance: Speeds up the clearing process by enabling automated reading.

2. Authentication: Ensures cheques are genuine and have not been tampered with.

3. Accuracy: Reduces human errors in cheque processing.

How does MICR Work?

The magnetic ink on cheques is scanned by MICR readers.
The machine deciphers the code and verifies the cheque details.
The system facilitates quick processing and settlement of payments.

Importance of MICR

Efficiency: Speeds up banking operations by automating cheque clearance.
Security: Reduces fraud by identifying alterations or forgeries.
Reliability: Ensures smooth processing of cheques across banks.

Where to Find the MICR Code?

Printed at the bottom of every cheque, near the cheque number.
Mentioned in the bank account passbook or statements.