International Bank Account Number
A typical British bank statement header showing the location of the account's IBAN. Note - The Wessex Bank is a fictitious bank, but the layout is based on the layout of a real British bank .
The International Bank Account Number (IBAN ) is an internationally agreed system of identifying bank accounts across national borders to facilitate the communication and processing of cross border transactions with a reduced risk of transcription errors. It was originally adopted by the European Committee for Banking Standards (ECBS), and later as an international standard under ISO 13616:1997. The current standard is ISO 13616:2007, which indicates SWIFT as the formal registrar. Initially developed to facilitate payments within the European Union. it has been implemented by most European countries and many countries in the developing world. especially in the Middle East and in the Caribbean. As at September 2014, 66 countries were using the IBAN numbering system. [ 1 ]
The IBAN consists of up to 34 alphanumeric characters, as follows:
The check digits enable a sanity check of the bank account number to confirm its integrity before submitting a transaction.
Basic Bank Account Number [ edit ]
The Basic Bank Account Number (BBAN) format is decided by the national central bank or designated payment authority of each country. There is no consistency between the formats adopted. The national authority may register its BBAN format with SWIFT, but is not obliged to do so. It may adopt IBAN without registration. SWIFT also acts as the registration authority for the SWIFT system, which is used by most countries that have not adopted IBAN. A major difference between the two systems is that under SWIFT there is no requirement that BBANs used within a country be of a pre-defined length.
The BBAN must be of a fixed length for the country and comprise case-insensitive alphanumeric characters. It includes the domestic bank account number, branch identifier, and potential routing information. Each country can have a different national routing/account numbering system, up to a maximum of 30 alphanumeric characters.
Background [ edit ]
Before IBAN, differing national standards for bank account identification (i.e. bank, branch, routing codes, and account number) were confusing for some users. This often led to necessary routing information being missing from payments. Routing information as specified by ISO 9362 (also known as Business Identifier Codes (BIC code), SWIFT ID or SWIFT code, and SWIFT-BIC) does not require a specific format for the transaction so the identification of accounts and transaction types is left to agreements of the transaction partners. It also does not contain check digits, so errors of transcription were not detectable and it was not
possible for a sending bank to validate the routing information prior to submitting the payment. Routing errors caused delayed payments and incurred extra costs to the sending and receiving banks and often to intermediate routing banks. [ 2 ]
In 1997, to overcome these difficulties, the International Organization for Standardization (ISO) published ISO 13616:1997. [ 3 ] This proposal had a degree of flexibility, which the European Committee for Banking Standards (ECBS) believed would make it unworkable, and they produced a "slimmed down" version of the standard which, amongst other things, permitted only upper-case letters and required that the IBAN for each country had a fixed length. [ 4 ] ISO 13616:1997 was subsequently withdrawn and replaced by ISO 13616:2003. [ 3 ] The standard was revised again in 2007 when it was split into two parts. ISO 13616-1:2007 "specifies the elements of an international bank account number (IBAN) used to facilitate the processing of data internationally in data interchange, in financial environments as well as within and between other industries" but "does not specify internal procedures, file organization techniques, storage media, languages, etc. to be used in its implementation". [ 5 ] ISO 13616-2:2007 describes "the Registration Authority (RA) responsible for the registry of IBAN formats that are compliant with ISO 13616-1 [and] the procedures for registering ISO 13616-compliant IBAN formats". [ 6 ] The official IBAN registrar under ISO 13616-2:2007 is SWIFT. [ 7 ]
IBAN imposes a flexible but regular format sufficient for account identification and contains validation information to avoid errors of transcription. It carries all the routing information needed to get a payment from one bank to another wherever it may be; it contains key bank account details such as country code, branch codes (known as sort codes in the UK and Ireland) and account numbers, and it contains check digits which can be validated at source according to a single standard procedure. [ 8 ] Where used, IBANs have reduced trans-national money transfer errors to under 0.1% of total payments.
Practicalities [ edit ]
The check digits enable the sending bank (or its customer) to perform a sanity check of the routing destination and account number from a single string of data at the time of data entry. [ 4 ] This check is guaranteed to detect any instances where a single character has been omitted, duplicated, mistyped or where two characters have been transposed. Thus routing and account number errors are virtually eliminated. [ 9 ]
The IBAN should not contain spaces when transmitted electronically: when printed it is expressed in groups of four characters separated by a single space, the last group being of variable length as shown in the example below: [ 1 ]