The MICR code is used extensively in a manual FUND TRANSFER process. Once a check is issued, it must be deposited by the recipient in his or her bank. The recipient's bank processes the check and sends a request for transfer of funds to the source bank. The check is also sent along with the fund transfer request to the source bank. After the source bank VALIDATES the information received, the fund is credited to the recipient's bank.

The purpose of the MICR code is to automate the check clearance process which results in a faster fund transfer. Since the MICR code can be read by a special check reading machine, the check clearance STEP is fast and not subject to human errors. It also serves as a protection against fraud. For instance, a check or DD that does not have a machine readable code can be identified as a fake check.

The MICR code is used extensively in a manual fund transfer process. Once a check is issued, it must be deposited by the recipient in his or her bank. The recipient's bank processes the check and sends a request for transfer of funds to the source bank. The check is also sent along with the fund transfer request to the source bank. After the source bank validates the information received, the fund is credited to the recipient's bank.

The purpose of the MICR code is to automate the check clearance process which results in a faster fund transfer. Since the MICR code can be read by a special check reading machine, the check clearance step is fast and not subject to human errors. It also serves as a protection against fraud. For instance, a check or DD that does not have a machine readable code can be identified as a fake check.