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CNB > Payments > IBAN > IBAN and BIC – use in payment systems

IBAN and BIC – use in payment systems

Generally on the IBAN

The IBAN (International Bank Account Number) is an account number format defined in the ISO 13616 international standard.

The IBAN format for the Czech Republic was defined in 2002 and is registered in the IBAN Registry. Its full wording, together with a list of all registered countries, is available at:
https://www.swift.com/sites/default/files/resources/swift_standards_ibanregistry.pdf

Generally on the BIC

The BIC (Business Identifier Code) uniquely identifies banks in international payments (similarly as the bank code in domestic payments). It consists of 8 or 11 characters. It is based on the international ISO 9362 standard. Further information can be found at: www.swift.com

Use of IBAN and BIC

The obligations of payers and payees when using the IBAN and BIC are governed by Regulation (EC) No. 260/2012 of the European Parliament and the Council of 14 March 2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending Regulation (EC) No 924/2009.

The correct IBAN (and the BIC pertaining to it) may be provided solely by the bank that maintains the account. If you need to know the IBAN you should contact the account holder. You can also calculate the IBAN for information purposes using the calculators at: http://www.cnb.cz/en/payment_systems/iban/index.html .

Use of an incorrect IBAN may result in your money going to the wrong account, the payment being delayed, or you having to pay extra costs.

IBAN and BIC on corporate documents of bank clients

Experience shows that at present the IBAN (and the BIC pertaining to it) are needed for all cross-border payments (from and to other countries). Bank clients are therefore advised to give their IBAN and BIC in addition to their bank account number in national format on their business stationery, documents and information documents. These two numbers are available to customers on their account statements.

Charges for cross-border payments, promotion of IBAN and BIC use

As regards charges for cross-border payments (payments between EEA member states, i.e. EU countries plus Norway, Iceland, Lichtenstein as well as Switzerland and Monaco) in euro, it is important that the charges a bank levies for cross-border payments in euro are the same as those it levies for domestic payments in euro.

This is essential in countries that have the euro as their national currency, i.e. in countries where cross-border payments can be compared with domestic payments. In the Czech Republic domestic payments are made in the Czech currency, whereas domestic payments in euro are made under the same regime as cross-border payments.

As regards the promotion of IBAN and BIC use, it is important to realise that a bank may levy additional charges if the customer does not communicate the IBAN of the payee and the BIC1 of the payee’s bank in payments to EEA countries and Switzerland and Monaco. This is the main reason why foreign payers require customers of Czech banks to provide their IBAN and BIC. The same applies in reverse, i.e. if a customer of a Czech bank does not use the IBAN and BIC on the payment order for a payment to the EEA or Switzerland or Monaco, additional fees may be charged to his account due to inaccurate payment instructions. In some cases payment may even be refused.

IBAN in transfers from foreign countries to the Czech Republic

Foreign partners sending payments to your account in the Czech Republic should be provided with the account number in IBAN format. IBAN is obligatory in case of sending payments from European countries.

Given the ongoing automation of foreign payments, use of the IBAN can also enhance and accelerate the processing of transfers from countries outside the EEA. An ever-increasing number of non-European countries are using the IBAN (see the IBAN Registry – link to the SWIFT website).

IBAN in domestic payments

Account number in national format is used in the domestic payments (i.e. for transactions in Czech koruna in the Czech Republic). Neverthlesess, banks are free to allow their clients to use the IBAN format in the domestic payment order as well. When the EUR is introduced in the Czech Republic, IBAN format will be obligatory for domestic payments.

 


In the case of the BIC, the bank is entitled to do so only until 1 February 2016 (in connection with countries where the euro is not the domestic currency until 31 October 2016). After this date the bank is not entitled to require the BIC and the account number in the IBAN format will be sufficient for the payment service user.