Table of Contents
MICR full form is Magnetic Ink Character Recognition. It is a technology used mainly by banks. It helps in the fast processing and clearing of cheques. The MICR code is printed at the bottom of a cheque. It contains details like bank code, account number, and cheque number.
MICR characters are written in special ink. Machines can quickly read this ink. Humans can also read MICR easily. This technology makes banking work faster and more accurately.
What is the Full Form of MICR?
MICR stands for Magnetic Ink Character Recognition.
What is MICR?
MICR technology helps machines read information quickly. A cheque has a code at the bottom. This code is called the MICR code. Banks use magnetic ink and special characters. This system helps to verify cheques.
It also speeds up the cheque clearing process. This system was introduced by the RBI. MICR helps banks detect fake cheques. It makes banking safe and fast.
In modern banking, MICR is essential. It facilitates quick and safe financial transaction processing.
MICR makes it possible to read check information accurately and quickly. Routing codes and account numbers are included in this. Errors during check processing are decreased by the technology. Additionally, it reduces the likelihood of fraud.
Must Check – List of All Full Form
Evolution of MICR in Banking
The origins of MICR ink go back to the late 1940s. At that time, computers used punched cards for data input. These cards stored binary-coded data.
As technology grew, banks wanted to improve cheque processing. Manual input of cheque details was tiring and slow.
In 1952, the American Bankers Association (ABA) formed a special committee. This committee looked for new ways to automate cheque processing. They aimed to develop a universal code that machines could easily read. This code would appear on cheques and other financial documents.
The solution was to use magnetic ink. This ink printed a unique code at the bottom of cheques. The code contained key details about the account and the transaction.
Banks used special machines called MICR readers. These machines quickly and accurately read the magnetic code. They sent the information straight to the bank’s computer system.
Process Behind MICR Encoding and Decoding
MICR stands for Magnetic Ink Character Recognition. Encoding uses special magnetic ink. This ink contains iron oxide particles.
During encoding, characters like numbers and symbols are printed. A specific font is used for this purpose. This font creates unique patterns. These patterns help MICR readers identify the characters. Banks mostly use MICR readers for this purpose..
In decoding, the document goes through a magnetic reader. The reader picks up magnetic signals from the ink. These signals come from the iron oxide in the ink. The reader converts the signals into characters.
This helps extract important details. These include account numbers and routing codes. The process is fast and accurate.
Also Check: UID Full Form
Pre-Unicode Standard Representation
Before Unicode, there were other standards for encoding. One such standard was ISO 2033:1983. Japan had a similar standard called JIS X 9010:1984. It was first known as JIS C 6229–1984.
These standards defined how to encode certain fonts. The fonts included OCR-A, OCR-B, and E-13B. These unique fonts were used mainly for machine reading. They helped in Optical Character Recognition (OCR) systems.
MICR International Spread
There are two main MICR fonts. These are E-13B and CMC-7. There is no global rule on which country uses which font. This usually does not cause problems. Cheques rarely move between countries.
The E-13B font is an international standard. It is defined in ISO 1004-1:2013. E-13B is commonly used in countries such as Canada, Australia, the United Kingdom, and the United States. This font is also widely adopted across Central America and various regions of Asia.
The CMC-7 font is also an international standard. It is specified under ISO 1004-2:2013. European countries like France and Italy use CMC-7. It is also common in Mexico & South American nations. Countries such as Argentina, Brazil, and Chile follow this standard.
Israel uses both fonts. This makes the system less efficient. Israel chose CMC-7. Palestinians use E-13B.
Also Check: ISI Full Form
MICR Font E-13B
E-13B is a MICR font with 14 characters. It includes the 10 decimal digits. It also includes 4 special symbols. These symbols are:
- Transit – marks bank codes.
- On-us – marks customer account numbers.
- Amount – marks transaction amounts.
- Dash – separates parts of numbers.
These symbols assist banks in processing cheques smoothly. In banking, this MICR line is often called the TOAD line. TOAD represents Transit, On-Us, Amount, and Dash.
E-13B characters are easy for both magnetic and optical readers to recognize. However, characters like 2 and 5 may sometimes look similar under magnetic reading. Optical reading helps as a backup.
E-13B characters are now part of Unicode. Before Unicode, ISO 2033:1983 was used. In ASCII-like encoding:
- Transit = 0x3A
- On-us = 0x3C
- Amount = 0x3B
- Dash = 0x3D
For EBCDIC (IBM code page 1001):
- Transit = 0xDB
- On-us = 0xEB
- Amount = 0xCB
- Dash = 0xFB
IBM code page 1032 later added more encoding options for printer compatibility. These included Siemens and Océ printers.
Also Check: UPSC Full Form
MICR CMC-7
CMC-7 is a MICR font with 41 characters. These include:
- 10 digits
- 26 capital letters
- 5 control characters
The 5 control characters are:
- S I (internal)
- S II (terminator)
- S III (amount)
- S IV (unused)
- S V (routing)
CMC-7 characters look like barcodes. Each has 2 large gaps in unique places. These gaps reduce reading errors in magnetic scanners.
However, optical scanners struggle with CMC-7. The bars are too narrow for reliable reading at normal scan resolutions. Sometimes upside-down scans give wrong results.
CMC-7 control symbols are not in Unicode. IBM code page 1033 encodes them as:
- S I = 0x5E, 0x61 or 0xCB
- S II = 0x4C, 0x5B or 0xEB
- S III = 0x60, 0x7E or 0xFB
- S IV = 0x50, 0x7A or 0xDB
- S V = 0x5C, 0x6E or 0xBB
Do Check: AICTE Full Form
MICR Reader
MICR characters are printed using one of two MICR fonts. These fonts use special magnetic ink or toner. This ink usually contains iron oxide.
During scanning, the document goes through a MICR reader. The reader does two things. First, it magnetizes the ink. Second, it detects the characters.
The MICR reader head reads the characters. This head works like a tape recorder head. As each character moves past the head, it creates a unique waveform. The system can easily identify this waveform.
MICR readers are mainly used for sorting cheques. They play a key role in the cheque distribution process. Merchants use MICR readers to organize cheques according to the bank. These sorted cheques are then sent to a clearing house. The clearing house redistributes the cheques to the correct banks.
When banks get the cheques, they carry out another MICR sorting process. This helps them identify the customer’s account. It also shows which branch the cheque needs to reach.
Today, many banks skip the final step of returning the physical cheque to the customer. Instead, they scan the cheques and store them digitally. Cheque sorting usually follows the geographical network of banks within a country.
Also Check: MBA Full Form
Unicode
Optical Character Recognition & MICR characters have been part of the Unicode Standard since version 1.1 (June 1993). Unicode did not track characters before version 1.1. However, these characters might have existed even in Unicode 1.0 or 1.0.1.
The Unicode block is known as Optical Character Recognition. This block ranges from U+2440 to U+245F. It includes four characters from the MICR E-13B font.
- U+2446 ⑆ OCR BRANCH BANK IDENTIFICATION (alias: Transit)
- U+2447 ⑇ OCR AMOUNT OF CHECK (alias: Amount)
- U+2448 ⑈ OCR DASH (alias: On-Us symbol)
- U+2449 ⑉ OCR CUSTOMER ACCOUNT NUMBER (alias: Dash)
Note: The names for U+2448 and U+2449 were switched by mistake in ISO/IEC 10646:1993. Unicode later assigned correct aliases. But the original names remain, as Unicode’s Stability Policy does not allow changing them.
The informal aliases commonly used are:
- Transit
- Amount
- On Us
- Dash
Before Unicode, these MICR symbols were encoded under ISO-IR-98. This was defined in ISO 2033:1983. They were simply called SYMBOL ONE to SYMBOL FOUR.
In this encoding, the MICR symbols followed the ASCII positions for digits. ISO 2033 also defined encoding for OCR-A and OCR-B. The encoding for E-13B is recognized by IANA as ISO_2033-1983.
Do Check – FIFA Full Form
Benefits of Using MICR Technology
The future of MICR in digital banking is changing with new technology. More banks are moving towards electronic payments, reducing the use of physical cheques.
- Efficient Cheque Processing and Clearance: MICR technology is mainly used for cheque processing. Special characters and numbers are printed in magnetic ink at the bottom of cheques. These allow automated machines to read and process cheques quickly and accurately. MICR also has an important role in the cheque clearing process. It helps banks move cheques between each other easily. This is possible because MICR offers a standard way to encode important cheque details.
- Accuracy: MICR improves both efficiency and accuracy in cheque processing. Automated machines read MICR characters at high speed. This reduces the chances of mistakes compared to manual data entry.
- Reduced Fraud: MICR helps banks prevent and detect fraud. The numbers and symbols printed with magnetic ink are hard to change or forge. Any tampering is usually easy to spot. Banks use MICR to check if cheques are real. This lowers the risk of fraud.
- Compliance: Many rules ask banks to use MICR. These rules help banks stay safe and trusted. They also help banks meet customer and government needs. MICR machines help cut down manual work in cheque processing. This makes the process faster. It also reduces human mistakes.
- Reduced Manual Intervention: MICR readers and sorting machines lessen human involvement in cheque processing. This makes the process faster and reduces the chance of errors.
Also Check: BCE Full Form
MICR Full Form FAQs
What is the full form of MICR?
MICR means Magnetic Ink Character Recognition.
Why do banks use MICR?
Banks use MICR to read cheques quickly and safely.
What does the MICR code contain?
The MICR code contains the account number, bank code, and cheque number
How does MICR stop fraud?
MICR uses unique magnetic ink and special fonts that are difficult to alter or forge. Banks can quickly detect any signs of tampering.
