International Bank Account Number (IBAN)

ByJulijana M Batanjac

IBAN is used by almost all European countries at this time and some countries from Western Asia.

The main purpose of IBAN is to facilitate automatic processing of money transfers, prevent delays and any extra costs due to the use of wrong account numbers in money transfers.

IBAN in Money Transfer

The general structure of account numbering methods and number formats is different from country to country and each bank codes are different and this leads to errors and delays in the completion of bank transfers.

As the business and financial transfers are globally increasing, the need has arisen to develop a special number for transfer of funds in domestic and foreign currencies.

IBAN has been created to resolve this particular issue and facilitate electronic banking transfers through the precise and clear indication of the beneficiary account number in transfer orders. IBAN allows sender banks to verify the validity of the provided beneficiary account number.

IBAN countries (countries that use IBAN) generate an IBAN for each of the bank account numbers. It includes the two check digits which are calculated with a specific mathematical algorithm. The customer, who intends to make a payment transfer, gives the beneficiary's IBAN to the sender bank, the sender bank will validate the check digits of IBAN before the payment transfer reaches the beneficiary's bank. If the beneficiary's IBAN is incorrect, the payment transfer will be stopped before transmitting it to the beneficiary's bank.

The Example of IBAN

Name of country IBAN length IBAN print format example
Germany 22 DE89 3704 0044 0532 0330 00
Italy 27 IT60 X054 2811 1010 0000 0143 456
United Kingdom 22 GB29 NWBK 6016 1341 9268 19
Saudi Arabia 24 SA03 8000 0000 6080 1016 2419
Tunisia 24 TN59 1000 6035 1835 9847 5531
France 27 FR14 2004 1010 0505 0001 3M02 555

IBAN Structure

IBAN is a combination of numbers and letters. It maintains information about: country (first two digits are Country Code), check sum (the following two digits are Check Digits to verify the validation of the IBAN), bank (four digits for Bank code) and account number. The format and length of an IBAN varies from country to country.

IBAN is unique for each account and includes numbers and letters. Thus, every account may have an IBAN and every IBAN designates one account.

The length, format and elements of the remaining part are determined by the country itself.

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