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: https://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 (hereinafter referred to as „SEPA regulation“).SEPA regulation applies to EU/EHP member states and specific territories.
The correct payee´s 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: https://www.cnb.cz/en/payments/iban/, https://www.iban.com/ or https://www.ibancalculator.com/.
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
The IBAN (and the BIC pertaining to it) are needed for all cross-border payments (from and to other countries). Since 31. 10. 2016 the BIC of the payee´s bank has not been allowed to require for cross-border payments in euro to EU countries and EEA. This type of information remain obligatory for other cross-border payments.
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 in euro to and from EU, a bank levies for cross-border payments are the same as those it levies for domestic payments. The rule is valid from 15. 12. 2019 for outgoing and incoming payments including cash withdrawal in euro from ATM, when the Regulation (EU) 2019/518 of the European Parliament and of the Council as regards certain charges on cross-border payments in the Union and currency conversion charges started to be partially effective.
A bank may levy additional charges if the customer does not communicate the IBAN of the payee in payments to EU. 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.