The first three digits of the Magnetic Ink Character Recognition number on your cheque specifies the _________ code in which you have the bank account.

The Correct answer is city.

Key Points

• The first three digits of the Magnetic Ink Character Recognition (MICR) code represent the city where the bank branch is located.
• MICR is a 9-digit code used to identify the location and branch of a bank, enabling smooth and secure cheque processing.
• The MICR code is printed on cheques using magnetic ink, which allows for machine readability and reduces errors in processing.
• The MICR code structure is as follows:
  • The first three digits represent the city (usually the PIN code prefix).
  • The next three digits signify the bank.
  • The last three digits indicate the specific branch.
• This coding system is particularly important for electronic clearing systems (ECS) and facilitates faster cheque clearance.
• For example, a MICR code starting with 110 indicates a bank located in Delhi, as 110 is the city PIN code prefix.
• The MICR system was introduced by the Reserve Bank of India (RBI) to streamline cheque processing and enhance banking efficiency.

Additional Information

• Branch
  • The last three digits of the MICR code represent the branch of the bank.
  • This helps in identifying the specific branch where the account is held.
  • For instance, in a MICR code, if the last three digits are 002, it could refer to the Connaught Place branch of a bank in Delhi.
• Bank
  • The middle three digits of the MICR code are used to identify the bank.
  • This ensures that cheques are routed to the correct financial institution during clearance.
  • For example, 500 may indicate a specific bank like State Bank of India.
• Country
  • The MICR code does not include any specific digits for identifying the country in its structure.
  • It is used within India for cheque processing and is regulated by the Reserve Bank of India (RBI).