General Information about the IBAN

The IBAN (International Bank Account Number) is a standardised bank account number format defined by the international ISO 13616 standard.

The IBAN format for the Czech Republic was defined in 2002 and is registered in the IBAN Registry. The full wording of this document, as well as the list of all registered countries is available at http://www.swift.com/dsp/resources/documents/IBAN_Registry.pdf.

General Information about the BIC

The BIC (Business Identification Code) is the unique address of the financial institution used for international banking connections (similarly to the bank code in domestic banking connections). The BIC is composed of 8 or 11 characters. It is based on the international ISO 9362 standard. You can find more information at www.swift.com.

International Format of Banking Connection (IBAN and BIC)

"Regulation (EC) No. 924/2009 of the European Parliament and of the Council of 16 September 2009 on Cross-border Payments in the Community and Repealing Regulation (EC) No. 2560/2001" places great emphasis on banking connections standardisation. Concerning that, it states the following obligations:

  • for the banks to state the account number in IBAN format and the bank code in BIC format;
  • for the account owners to inform the present and potential payers of the banking connection of their account in IBAN and BIC format on documents used in cross-border payments;
  • for payers to use the correct IBAN and BIC on the transfer orders.

Only the bank who maintains the account can provide the correct number in IBAN format (and the related BIC). If you need to find out an IBAN number, contact the account owner. For your information, you can calculate the IBAN on website: http://www.cnb.cz/en/payment_systems/iban/index.html.

Using a wrong IBAN can result in transferring the funds to an incorrect account, in payment delay or in extra costs.

The IBAN on Bank Clients' Corporate Documents

Practice has shown that bank details in international format (IBAN and BIC) are necessary for all payments, not only payments for goods and services but, for example, when paying various charges, penalties, payments from and to abroad of a social nature, and so on. We therefore recommend that Bank clients provide the BIC and IBAN alongside the bank account number in domestic form on corporate materials (invoices, letter paper), other documents (contracts and so on) and on information materials.

Cross-border Transfer Fees and International Banking Connections Support

Regarding the cross-border transfer fees (i.e. transfers between the EEA member states = EU countries + Norway, Iceland, Liechtenstein) in EUR, it is essential that the fees charged by the bank for cross-border transfers in EUR are equal to the fees charged by the bank for domestic transfer in EUR.

This provision has brought a major change to countries with EUR as a national currency, i.e. to the countries with the possibility to settle cross-border transfers through domestic funds transfer. Domestic funds transfers in the Czech Republic are executed in Czech currency, while the domestic transfers in EUR are executed in the same mode as cross-border transfers.

Regarding IBAN and BIC support, it is necessary to expect that the bank may charge additional fees when the client does not use IBAN of the beneficiary and the beneficiary's bank BIC with transfers to EEA member states and to Switzerland. This is the main reason why foreign payers request from clients of Czech banks their banking connection in international format. The same applies in the opposite case, i.e. when a client of a domestic bank does not use the international banking connection format on a transfer order to EEA or Switzerland, their account may be debited with additional costs because of inaccurate payment instructions. In some cases, the payment transfer may even be refused.

The IBAN and Transfers from States outside the EEA

Foreign partners outside the EEA can continue to be provided with the account number in both domestic and IBAN formats.

Due to increasing automation of foreign funds transfers, use of the IBAN may also improve accuracy and expedite processing of transfers from states outside the EEA. More and more countries are now using the IBAN, although the majority of them are still European (see Register of European Account Numbers).

The IBAN in Domestic Funds Transfers

On the basis of discussions between the Czech National Bank and the Czech Banking Association, it was decided in 2003 that the domestic account number format will continue to be used (i.e. the form that every account owner knows and uses – e.g. 19-12343/0100) in the domestic funds transfer (i.e. for transactions in CZK in the Czech Republic).

The IBAN is thus not yet used in domestic funds transfers. Banks can allow their clients to use it, but for interbank payments through the CERTIS clearing centre, the bank must use the domestic account number format.