The MICR code printed at the bottom of a cheque leaf consists of how many digits?
- A.Six
- B.Seven
- C.Nine
- D.Eleven
Correct answer
Explanation
The correct answer is C, nine. The Magnetic Ink Character Recognition code has nine digits, of which the first three stand for the city, the next three for the bank and the last three for the branch; it is printed in magnetic ink so that a sorting machine can read it during cheque clearing. Option A is wrong because six digits make up only the branch part of an IFSC, not a code by itself. Option B is wrong because seven is the length of the MMID used in IMPS, whose first four digits identify the bank. Option D is wrong because eleven is the length of the IFSC, which is alphanumeric rather than numeric. Note also that with the Cheque Truncation System the image of the cheque now travels for clearing rather than the paper, although the MICR line is still read from that image.
Read the full article: Payment Systems in India: NEFT, RTGS and IMPS Notes
Practice Questions
View allWhat is the minimum amount that can be remitted through RTGS?
- A.Ten thousand rupees
- B.One lakh rupees
- C.Two lakh rupees
- D.Five lakh rupees
Show answer
RTGS is meant for large value payments, and the Reserve Bank has fixed a floor of two lakh rupees for a remittance through it, while setting no ceiling of its own on the amount.
Read the full explanation →NEFT stands for:
- A.National Electronic Funds Transfer
- B.New Electronic Fund Transaction
- C.National Exchange of Funds and Transfers
- D.Net Electronic Financial Transfer
Show answer
NEFT is the nationwide system operated by the Reserve Bank of India for transferring funds from one bank account to another, settled on a deferred net basis in half hourly batches and available on all days of the year since December 2019.
Read the full explanation →In which payment system is each transaction settled individually and in real time, without being grouped into batches?
- A.NEFT
- B.RTGS
- C.NACH
- D.Cheque Truncation System
Show answer
The words in the name say it: real time means the instruction is carried out as it is received, and gross settlement means each instruction is settled by itself rather than set off against others.
Read the full explanation →The Immediate Payment Service (IMPS) is operated by:
- A.The Reserve Bank of India
- B.The State Bank of India
- C.The National Payments Corporation of India
- D.The Indian Banks Association
Show answer
IMPS was launched by that organisation in 2010 and was the first Indian system to offer interbank transfer instantly at any hour, including Sundays and holidays.
Read the full explanation →How is a NEFT transaction settled?
- A.Individually, the moment it is received
- B.On a deferred net basis, in half hourly batches
- C.Only at the end of the working day
- D.Only after the beneficiary bank confirms it
Show answer
NEFT holds instructions for a short period, works out what each bank owes the others on balance, and settles only that difference; the batches run every half hour through all twenty four hours, since the service was made available on all days of the year in December 2019.
Read the full explanation →