MICR Full Form – Magnetic Ink Character Recognition

MICR Full Form

MICR Full Form – Magnetic Ink Character Recognition

The full form of MICR is Magnetic Ink Character Recognition“.

Magnetic ink character recognition code, known in short as MICR code, is a character recognition technology used mainly by the banking industry to streamline the processing and clearance of cheques and other documents.

Sorting of cheques is done as per the geographical coverage of banks in a nation.

Israel is the only country that can use both fonts simultaneously, though the practice makes the system significantly less efficient.

 

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 (usually added after a cheque is presented for payment), and a control indicator.

The CMC-7 font is widely used in Europe, including France and Italy, and South America, including Argentina, Brazil, Mexico, besides other countries.

 

Many banks no longer offer this last step of returning the cheque to the customer. Instead, cheques are scanned and stored digitally.

MICR Full Form – Magnetic Ink Character Recognition

 

The format for the bank code and bank account number is country-specific.

The use of MICR allows the characters to be read reliably even if they have been overprinted or obscured by other marks, such as cancellation stamps and the signature.

Upon receipt, the banks perform another MICR sort to determine which customer’s account is charged and to which branch the cheque should be sent on its way back to the customer.

This situation is the product of the Israelis adopting CMC7, while the Palestinians opted for E13B.

 

As each character passes over the head, it produces a unique waveform that can be easily identified by the system.

 

The technology allows MICR readers to scan and read the information directly into a data-collection device.

For example, a merchant will use a MICR reader to sort cheques by bank and send the sorted cheques to a clearing house for redistribution to those banks.

MICR Full Form – Magnetic Ink Character Recognition

 

Unlike barcode and similar technologies, MICR characters can be read easily by humans. MICR encoded documents can be processed much faster and more accurately than conventional OCR encoded documents.

MICR readers are the primary tool for cheque sorting and are utilised across the cheque distribution network at multiple stages.

The characters are read by a MICR reader head, a device similar to the playback head of a tape recorder.

There are two major MICR fonts in use: E-13B and CMC-7.

There is no particular international agreement on which countries use which font.

For well printed MICR documents, the “can’t read” rate is usually less than 1%, while the substitution rate is in the order of 1 per 100,000 characters.

Which performs two functions: magnetization of the ink, and detection of the characters.

MICR Full Form – Magnetic Ink Character Recognition

 

In practice, this does not create particular problems as cheques and other vouchers do not usually flow out of a particular jurisdiction.

Rejected items are hand processed.

The MICR E-13B font has been adopted as the international standard in ISO 1004:1995, and is the standard in Australia, Canada, the United Kingdom, the United States, as well as Central America and much of Asia, besides other countries.

MICR characters are printed on documents in one of the two MICR fonts, using magnetizable (commonly known as magnetic) ink or toner, usually containing iron oxide.

 

The error rate for the magnetic scanning of a typical cheque is smaller than with optical character recognition systems.

In scanning, the document is passed through a MICR reader.

MICR Full Form – Magnetic Ink Character Recognition

 

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