MICR – Magnetic Ink Character Recognition.

MICR Code is a character-recognition technology used mainly by the banking industry to ease the processing and clearance of cheques and other documents. 

The MICR encoding, called the MICR line, is at the bottom of cheques and other vouchers and typically includes the document-type indicator, bank code, bank account number, cheque number, cheque amount, and a control indicator.

Micr code of Bank

How MICR Code Is Formed?

It is a nine digit numeric code where every three digits implies some critical data about the bank and the exchange. The initial three digits of the MICR represent the city code which demonstrates the city in which the bank office is found. In the most of the cases it is the initial three numbers of PIN code like for Delhi the initial three numbers will be ‘110’. The following three digits represent the bank code i.e. the character of the bank and the last three digits represent the bank office code i.e the identity of the area of the bank office.

Unlike to the manual clearing of checks where there is a possibility of numerous human mistakes and consequent postpone in passing, the MICR code on the check printed with an unique magnetic ink generally press oxide has magnetic material present in it and consequently makes it machine-readable and almost error proof!

Under this system the perusing machine or a check sorting machine reads through a check when embedded and distinguishes the branch the cheque belongs to and activates the automation computerization clearing procedure.

The MICR code is so clear and fine that the machine could read it regardless of the possibility that the MICR code isn’t visible due to other marks or stamps on it.

As per the Reserve Bank of India report (Payments in India: Vision 2009-2012), all bank offices will be empowered with MICR codes.

Additionally, the RBI means to decrease paper-based clearing process by presenting MICR- Check Processing Centers that will transform more than 95 per cent of volume and value of cheques processed in the country.