Banks and financial institutions uses different identification numbers to process there transactions fast and accurately. Account number is one example of this kind of identification number which helps bank as well as the account holder to make and process each bank transaction respectively. Likewise Fund transfer is one process which needs some sort of identification for banks to make faster and accurate transaction between different banks located worldwide (Global Fund Transfer).
Earlier banking transactions were limited to one bank or country but with time international transactions are increasing which demands some sort of clear identification to make sure your transaction will take place correctly and in time. Swift Code and IBAN (International Bank Account Number) code are identification codes used by banks and financial institutions for easy identification of international bank accounts.
IBAN (International Bank Account Number), as name suggest it is an international identification number which is the extension of your existing bank account number that can be recognized internationally. You can use IBAN to make international payments as it allows easier and faster international transactions. Developed by ISO (International Organization For Standardization), is an international standard for identifying bank accounts across worldwide with a minimal risk of transcription errors.
In Simple worlds, If you have someone in foreign country to whome you want to make payment then you can get IBAN number from your bank and make international wire transfer of money easily. IBAN includes the country code, check digits ( Can be validated in any country according to a single standard procedure), bank account number etc. that reveals all necessary information.
Example Of IBAN Code
How to get IBAN number? The IBAN appears on account statements and in the bank’s online systems.
Also Read : Difference Between Swift Code And IFSC Code
SWIFT code stands for ‘Society for Worldwide Interbank Financial Telecommunication’ code. A SWIFT code is a universal way of identifying banks throughout the world. The SWIFT code is an 8 or 11 alphanumeric characters code that uniquely identifies financial institution. The first four characters of a SWIFT code are letters and refer to the bank specifically. The next two characters are the country code, and the last two characters are the location code. If a SWIFT code is eleven characters, this means that the bank has added a three-digit code to denote a specific branch of a bank. It is the standard format of Bank Identifier Codes (BIC) which is approved by the International Standard Organization (ISO) and represents a particular bank or bank branch. The purpose of these codes includes the transferring of money between banks especially for international wire transfers and also used for exchanging of other messages between banks.
Difference Between IBAN Code And Swift Code
- SWIFT code is for identification of a bank whereas IBAN is International Bank Account Number.
- IBAN is used by customers to send money abroad while SWIFT is used by banks to exchange financial and non financial transactions.