Things to Know About IBAN Number & Swift Code

IBAN Number

International Bank Account Number or IBAN is the international numbering system used to identify an overseas bank account. The first two digits denote the country code, then two Checksum-numbers followed by several alphanumeric characters. 

IBAN does not replace the normal bank account number but provides additional information to identify overseas payments.

History of IBAN Number

Before the introduction of IBAN number, there was a total delay in the transaction process as it was hectic to enter the number, codes, digits etc., without any mistakes. The routing always showed some errors, making it challenging to enter and feed every detail. A system for IBAN was devised in 1997 by the internal organization for standardization, which also serves as an internal standard-setting council and comprises various members of national standard organizations. The European Committee for Banking Standards raised numerous issues with the process; hence it was not authorized. There was a revised version of this that demanded lengthy IBAN fixes for each nation. The IBAN was finally accepted by the registration authority and used as the identity for internal transfers.

IBAN supports a specific account identification format. It includes the knowledge needed to facilitate a smooth transfer.

It transports the routing information required to approve the transfer of funds from one bank to another.

Key features of the IBAN number

Listed below are some of the key features of IBAN Number.

• IBAN is a standard international numbering system for individual bank accounts worldwide.
• Europe enabled this system to give a standard numbering to receive overseas payments.
• IBAN is related to an individual account involved in the overseas payment.
• IBAN is a tool to measure to verify the details of the transaction.

The role of IBAN in International Money Transfer

IBAN is an internationally accepted code for money transfers. It is used for routing errors in international money transfers. IBAN can validate the beneficiary account, so the payment should be reliable. The IBAN contains all the information required to identify the account to which payment must be made. 

Many European countries use IBAN numbers for their international payment systems, whereas many don’t. India still needs to adopt the system. The lengths of the IBAN depend from country to country. The maximum length goes up to 34 characters. 

How do you find your IBAN Number?

An IBAN is in the institution or the paper bank statements. If you use online banking to make payments, you can also locate it in your account information online. You can log in and see your code in the statement if you have an application. If you can’t find the numbers in these places, contact your bank to get them. 

SWIFT Code

SWIFT Code, or Society for Worldwide Interbank Financial Telecommunication, is a messaging system financial organizations use to securely convey data and instructions using a set of pre-established codes.

SWIFT has been an established method since 1973. It has a unique code of 8 or 11 characters. 

The majority of foreign fund transfers continue to be performed via this approach. One of the leading causes is that the SWIFT messaging system enables banks to exchange a large quantity of financial information, such as account status, debit and credit amounts, and information about money transfers.

To guarantee a seamless and rapid international transfer, it is critical to have access to both SWIFT codes and IBANs. The bank’s needed identification varies depending on the bank being used, the bank of the beneficiary, and the nations where the transfer is made and received. However, with the introduction of both these codes, the probability of committing errors has reduced.

How do you find a SWIFT code?

You can easily find the SWIFT code on the bank’s website or the account statement. 

The key difference between IBAN & SWIFT code

Even though IBAN and SWIFT codes are used for overseas payments, they have distinct differences.

• Digit/character difference: IBAN consists of 32 alphanumeric characters, which include a two-digit country code and a two-digit checksum followed by lengthy alphanumeric characters Vs a SWIFT code has 8-11 characters. SWIFT code contains a four-letter bank identification code for the recipient, a two-letter nation code, a two-digit location code, and an additional three-digit branch identification number. Unlike IBAN codes, a SWIFT code does not specify a specific account number.
• Usage: IBANs are usually used by European and other neighbouring countries. Despite not having IBANs, banks in the US and Canada are aware of the system and use it to handle outgoing foreign payments. IBAN codes are not as widespread as SWIFT codes, which are the norm outside of Europe. Additionally, although SWIFT is utilized by other organizations, like clearing-houses and brokerages, IBAN is primarily reserved for banks.

Epilogue

There was no standardized identification number before the introduction of these codes. The receiving country may not have recognized the data that one country used to identify the banks and individual accounts of the transmitting country. Due to a lack of regular procedures, there were no methods to verify if the data entered was accurate. Adopting these identifying techniques was essential in streamlining the international sending procedure.

Remitforex by Unimoni India uses a SWIFT transfer, making your transactions much easier and more secure. We serve you at 300+ locations across India. For more information, please visit your nearest branch.