IBAN - what is it? What does the bank's IBAN number mean?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

If at least once in your life you have had to transfer funds to European countries, then the concept of “IBAN code” is familiar to you. The sender needs to name it to complete the transfer. To find out the IBAN number, it is enough to come to any banking institution and open a current account. Employees of some financial institutions may recommend a SWIFT code to the sender, with which you can also receive a transfer. Then why is there a need for an IBAN? What's this? And why is it not available in all banks?

Basic information

We determined above that an IBAN is required to complete an international money transfer. What is it - let's find out. This code is the international current account number of a particular client. It is drawn up in accordance with international standards for assigning account numbers for EU countries and some other states.

Since 2007, this code has become a unique offici althe identifier of the beneficiary's account through which transactions are made to transfer funds to bank customers located in the economic zone of the European Union, in any currency. Over time, other countries began to use it. Now the number of countries using the code has grown to 62. But in the Russian Federation, such an account standard does not exist in the banking system, which is why banks refuse to issue it.

For citizens of Russia, an IBAN account number may be required when making a money transfer to the EU countries with crediting to the recipient's current account. Information regarding the code is provided by the recipient himself, having previously asked about it from his bank.

Since 2007, banks have the right not to conduct fund transfer transactions if the account numbers are not in the IBAN format. But this rule applies only to those cases when the transfer is made in foreign currency, and only in favor of a person who is served by a bank in the EU and EEC countries. Accordingly, by sending funds, for example, to France without specifying the IBAN code, the sender will receive them back due to a refusal by the bank. The money will not be returned in full, as the bank will withhold an amount equal to the return fee.

Code structure

Each letter and number in the IBAN carries a certain semantic purpose. Let's take a closer look at what this means:

• the first two letters carry information about the country in which the beneficiary's bank is located;
• the next two digits indicate information aboutunique IBAN number, which is obtained by calculation;
• the next two digits carry information about the BIC code of the banking institution;
• the remaining digits are the customer's account number within the bank.

When do I need an IBAN code?

It is mandatory when making payments and transfers in favor of persons residing in the EU and EEC countries, as well as some other states that already use a similar standard of accounts. And for money transfers to Russia, there is no need for it yet.

How to apply the code when making international transactions?

Consider the case when a foreign partner sends you an account that has both a traditional account number and an IBAN. When making an international payment, it is better to indicate the IBAN in the order in the field intended for the beneficiary's account number. Then the payment will be faster, as the processing of documents will take less time. It should be noted that if the payment order is filled out electronically, it is recommended to enter the IBAN without spaces and extra characters.

Use of IBAN number by Russian banking institutions

Transfers in favor of a citizen of the Russian Federation are made without specifying IBAN. To do this, just enter the SWIFT code.

The IBAN account must be indicated only for external transfers from a current account opened with a bank in the Russian Federation. And it is only needed if the payment goes to a bank located in the EU and EEA or in other countries that have also begun to apply this account standard.

Which identifier is used fortransfers from EU countries to Russian bank accounts

We wrote above that if funds are transferred from EU and EEA countries to Russian accounts, then IBAN is not indicated in the payment order. What does it mean? This means that the sender just needs to indicate in the document that the transfer is not carried out in the EU, but outside it.

When sending funds from Europe to the accounts of Russian banks, it is required to issue a payment order for external banking operations. At the same time, the following kind of information should be present there:

• SWIFT code belonging to the beneficiary bank;
• settlement account of the client of the beneficiary bank.

How do I find out the details for international cash transactions?

1. Information about the necessary details, which are indicated in payment documents when making international transfers, can be found on the official websites of banking institutions.
2. If you have an account opened with a banking institution of another state that has the right to set an IBAN, for example, in Privatbank, then information about the code can be found in one of the following ways: by contacting a bank branch through the Internet banking system, or by calling to the hotline.
3. In the banking system there is such a thing as an intermediary bank. Its services can be used by banking institutions that are not able to directly perform international banking operations. For example, Alfa-Bank signed an agreement with three financial institutions in Germany so that its customers could transfermoney in this state. Bank employees will tell you exactly how to make an international transfer.

International payments with Sberbank

To make international payments from any of the countries (including the EU and EEA states) through Sberbank, the following information must be present in the payment order:

• name of beneficiary bank;
• location of the branch that services the account;
• full name of account holder;
• his passport details, TIN and KPP numbers;
• BIC, correspondent account and settlement account of the beneficiary bank.

You may need additional details, they can be found on the official website of the bank. Sberbank's IBAN is not listed there, but only because it does not yet exist in nature. For international transfers, Sberbank uses only the SWIFT code, and it must be called the sender of funds. Subdivisions located in different regions also have different SWIFT codes. Information that is suitable for you can be found on the bank's website.

Conclusion

After studying all the information, it became clear what a bank's IBAN is and its function in the banking system. Such a single account standard can make the processing of payments made by EU and EEA banks and reduce the number of errors when entering details, as the sending bank of funds can check the correctness of the specified account number before making a payment.