Arab Today, arab today iban to be mandatory for banking transactions
Last Updated : GMT 03:23:35
Arab Today, arab today
Arab Today, arab today

IBAN to be mandatory for banking transactions

Arab Today, arab today

Arab Today, arab today IBAN to be mandatory for banking transactions

Dubai - Arabstoday

Central Bank directive effective from November 19. The UAE Central Bank announced Monday that the International Bank Account (IBAN) numbers will be mandatory for all account holders in the UAE from November 19 to conduct any local or international transactions.\"From November 19, customers will be required to use their IBAN to complete any local or international payment transactions. Additionally, the customer will need to ensure that their IBAN is used by the sender when they receive electronic payments, both locally and internationally,\" the Central Bank said in a statement Monday.IBAN is a standardised numbering system developed to identify bank accounts around the world. It was originally developed by banks in Europe to simplify transactions involving bank accounts from other countries.IBAN implementation in the UAE could mean that all customers will have specific IBAN numbers in addition to their present account numbers.The UAE Central Bank, in consultation with major banks in the country, has decided to keep the length of the IBAN at 23 digits. This is broken down into a two-letter alphabetic country code that will be ‘AE\' for all accounts in the UAE, two-digit check code, three-digit bank code and 16-digit account number.The IBAN is an international standard for identifying bank accounts across national borders in a way that would minimise the risk of transcription errors.The implementation of IBAN will allow electronic payments to be sent and received seamlessly between banks in the UAE and in those countries where IBAN has been adopted.For all other banks, the traditional account number along with bank and branch identifiers must be specified in the transaction record. Currently, over 50 countries use the IBAN standards. This includes all European Union countries, as well as some countries in the region such as Kuwait, Lebanon, Saudi Arabia and Tunisia.The UAE Central Bank yesterday said that it had carefully examined the benefits and challenges of implementing IBAN from the experience of other countries.\"We are confident that this extensive analysis will enable us to successfully transition to the new system without any disruption of banking services and with minimal impact to customer requests,\" the Central Bank statement said yesterday.The implementation of these unique numbers is expected to reduce potential identity errors in bank transfers.Before IBAN, customers, especially individuals and small and medium businesses (SMEs), used to be confused by the differing national standards for bank account identification such as bank, branch, routing codes and account number. This often led to necessary routing information being missing from payments.Simple errors of transcription were not detectable and it was not possible for a sending bank to validate the routing information prior to submitting the payment. Routing errors were therefore frequent, causing payments to be delayed and extra costs to be incurred by the sending and receiving banks.IBAN imposes a flexible but regular format sufficient for account identification and contains validation information to avoid errors of transcription.It contains an account identity that can be validated in any country according to a single standard procedure. It also contains all the key bank account details such as bank identifier codes, branch codes (known as sort codes in the United Kingdom and Ireland) and account numbers.The IBAN should not contain spaces when transmitted electronically. However, when printed on paper, the IBAN is expressed in groups of four characters separated by a single space.All banks operating in the country are responsible for the creation and distribution of IBAN numbers to their account holders. The IBAN will be communicated to customers through personalised letters, emails, account statements and/or awareness campaign letters.IBAN will be implemented for all accounts in the UAE. Banks will generate these numbers and advise customers ahead of the November deadline set by the UAE Central Bank. From the date of roll-out, IBAN will be mandatory for all inter-bank domestic transfers as well as inward remittances. The central bank will reject transactions in the absence of IBAN after an initial grace period of three months. Bankers said they expect processing delays and potential charges for transfers and remittances not bearing IBAN during the grace period.

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Arab Today, arab today iban to be mandatory for banking transactions Arab Today, arab today iban to be mandatory for banking transactions

 



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