MICR – Magnetic Ink Character Recognition
MICR (magnetic ink character recognition)
is a technology used to verify the legitimacy or originality of paper documents, especially checks. Special ink, which is sensitive to magnetic fields, is used in the printing of certain characters on the original documents. Information can be encoded in the magnetic characters.
The use of MICR can enhance security and minimize the losses caused by some types of crime. If a document has been forged – for example, a counterfeit check produced using a color photocopying machine, the magnetic-ink line will either not respond to magnetic fields, or will produce an incorrect code when scanned using a device designed to recover the information in the magnetic characters. Even a legitimate check can be rejected if the MICR reader indicates that the owner of the account has a history of writing bad checks.
Retailers commonly use MICR readers to minimize their exposure to check fraud. Corporations and government agencies also use the technology to speed up the sorting of documents.
MICR characters can be read easily by humans. It is a 9-digit code
Components of MICR
- The first three digits represent the city code of the bank branch – generally the pin code initials,
- The next three digits represent the bank code, and
- The last three digits represent the bank branch.
Example: MICR-No of a branch of Punjab National Bank is 110024490.
- Here, 110 – represents represent the city code of the bank branch.
- The second characters 024 represents the bank code.
- Last 3 characters 490 represents the bank branch.