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:

http://www.swift.com/solutions/messaging/information_products/directory_products/iban_format_registry/index.page?lang=en.

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

Regulation (EC) No. 924/2009 of the European Parliament and the Council of 16 September 2009 on cross-border payments in the Community and repealing Regulation (EC) No. 2560/2001 puts great emphasis on standardisation of payments. In this regard it imposes the following obligations:

• on banks
  to indicate the IBAN and BIC on statements of account
• on account holders
  to communicate their IBAN and BIC to current and potential payers on documents used in cross-border payments
• on payers
  to use the correct IBAN and BIC on their orders

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, 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 the IBAN and BIC are needed for all payments – not only payments for goods and services, but also payments of various fees and fines, cross-border payments of a social nature, etc. Bank clients are therefore advised to indicate on their business stationery (invoices, letter-paper), other documents (agreements, etc.) and information documents their BIC and IBAN in addition to their bank account number in national format.

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) 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 provision meant a fundamental change 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 BIC of the payee's bank in payments to EEA countries and Switzerland. This is the main reason why foreign payers require the 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, additional fees can be charged to his account due to inaccurate payment instructions. In some cases payment can even be refused.

IBAN in transfers from non-EEA countries

Foreign partners outside the EEA can continue to be provided with the account number in either domestic format or IBAN format.

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 countries – naturally mostly from Europe – are using the IBAN (see the IBAN Registry – link to the SWIFT website).

IBAN in domestic payments

Based on discussions between the CNB and the Czech Banking Association it was decided in 2003 that the domestic account number format (i.e. the format that every account owner knows and uses, e.g. 19-12343/0100) would continue to be used in domestic payments (i.e. for transactions in Czech koruna in the Czech Republic).

Consequently, the IBAN is not yet used in domestic payments. Banks can allow their clients to use the IBAN, but for interbank payments processed through the CERTIS interbank payment system the domestic account number format must be used.