What is IBAN (International Bank Account Number)?

An ‘International Bank Account Number (IBAN)’ is a standardised international numbering system used to uniquely identify bank accounts for financial transactions. The primary purpose of the IBAN is to facilitate the accurate and efficient processing of international payments and reduce the risk of errors in money transfers.

Key characteristics and components of an IBAN include:

Country Code: A two-letter code that represents the country where the bank account is held. It identifies the country’s financial institution.

Check Digits: Two digits that serve as a mathematical checksum to ensure the accuracy of the IBAN. They are used to verify the validity of the IBAN during the transfer process.

Bank Identifier: A series of letters and numbers that uniquely identify the specific bank or financial institution where the account is held.

Account Number: The account number, which can vary in length, is specific to the individual bank account. It follows the bank identifier and is used to identify the recipient’s account.

The structure and length of IBANs can vary from country to country, as each country may have its own standards for IBAN formatting. The use of IBANs has become increasingly important for cross-border financial transactions, as it helps ensure that funds are sent to the correct destination and account.

When making international payments or transferring money internationally, individuals and businesses are typically required to provide the recipient’s IBAN along with other relevant details, such as the recipient’s name and the purpose of the payment. The IBAN serves as a crucial element in the international banking system to streamline transactions and reduce the likelihood of errors or delays in fund transfers.