In modern society, international translations have become very popular. And it’s no secret that it’s more convenient to execute them from a bank account. When you need to receive a transfer from the countries of the European Union and the European Economic Area, as well as some other states, the sender will ask you for the IBAN code. What is it and what is it for?
The abbreviation IBAN stands for international bank account number. This means that it is an ordinary code that operates on an international platform. It is assigned according to the accepted international standard.
Purpose and main advantages of IBAN
You will need an IBAN (international bank account number) if you decide to make a money transfer credited to your account at a bank located in an EU or EEA country , or in some other states. The code number can be found by sending a request to the recipient of funds.
If the code is not indicated in the payment documents or if it is spelled incorrectly, the recipient will not receive the money. They will be returned back to the sender, but not in full, but after deduction of the bank commission. The order related to the indication of IBAN in all payment orders, as part of payments in foreign currency in favor of customers of banking institutions of the EU and EEA countries, began to operate on January 1, 2007. Now this code is used in more than ninety countries of the world.
We list the main advantages of using this identifier:
- accounts in banking institutions are established in accordance with a single standard;
- automatically checks the correctness of bank accounts;
- there is an increase in the quality of customer service ;
- automatic processing of payments occurs;
- the payment is faster and the transaction cost for the bank customer is reduced;
- there is a decrease in the likelihood of an error on the part of the operator when performing the transfer.
Code structure
Consider the structure of the IBAN code. What is this identifier, will help determine the decoding of the alphanumeric characters of which it consists. The number of characters reaches 34, and each of them carries certain information:
- the first two characters are the code of the country in which the banking institution of the account holder is located;
- the next two are a unique control code that is set in accordance with an international standard;
- the next four repeat the first four numerical values of the BIC code of the financial institution;
- the remaining numbers represent the unique code of the owner’s account, which is set by the banking institution itself.
Which countries already use the IBAN?
More than ninety countries of the world use the international bank account identifier in the banking system. These include the former union states - Georgia and Kazakhstan. In Russia, banking institutions do not yet have an IBAN. What is it, most of our citizens have no idea. But now often they are faced with the need to indicate this identifier in order to receive funds from abroad.
It is interesting that in Kazakhstan, Sberbank is already using IBAN for money transfers abroad, while the central office of Sberbank of Russia has not yet touched upon such an innovation.
How to make currency transfers to Russia?
As it became known, Russian banks do not use the IBAN identifier in their operations when conducting transactions related to the transfer of funds from the EU and EEA countries. Therefore, our citizens may encounter some difficulties in their implementation. Since if you do not provide this code to the European bank-sender, it will simply refuse to perform the operation.
What to do in this case? If you are the sender yourself and you need to transfer a certain amount to Russia, try to explain the situation to the bank employee. If you are the recipient, then explain to the sender that in order to complete the transfer, he only needs to indicate the details that your Russian bank owns. If the conversation with the bank did not bring any result, contact another banking institution.
To transfer to an account opened with Sberbank or some other banks, you will need to name the SWIFT and BIC codes (it does not have IBAN).
What is SWIFT? This code is a kind of IBAN analogue, but unlike it, this identifier is valid in the Russian Federation.
The BIC code is an internal banking number that is set for any account served in Russia. It allows you to determine not only the owner of the account, but also the territorial location of the bank branch in which this account was opened.
Both of these identifiers are included in the required details of an account operating in Russia. In general, for European countries it is enough to indicate these details in order for the money transfer operation to take place.
How do I know if the indicated recipient is an IBAN?
If you enter the wrong IBAN code, then the money simply will not reach the addressee and will be returned to the sender minus the bank commission. IBAN verification can be carried out using the IBAN_checker program developed by American Express Bank Ltd. For verification, you need to enter the code provided by the recipient in the appropriate line. The program determines the correctness of the code by the following parameters:
- correct spelling of the identifier;
- the correct number of characters in the number.
If both of these indicators are correct, then this means that the IBAN check was successful, you have the correct data.