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Banks in Egypt switch to IBAN standard to ease cross-border transactions - Daily News Egypt

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Banks in Egypt switch to IBAN standard to ease cross-border transactions

IBAN used in international transfers, standard method for accurate identification of bank accounts


Banks operating in the Egyptian market started using the International Bank Account Number (IBAN) standard last week, to facilitate the communication and processing of cross-border transactions.

An IBAN is an internationally agreed upon system of identifying bank accounts across national borders, which also ensures a reduced risk of transcription errors.

The IBAN consists of up to 34 alphanumeric characters comprising a country code; two check digits; and a number that includes the domestic bank account number, branch identifier, and potential routing information. The check digits enable a check of the bank account number to confirm its integrity before submitting a transaction.

For Egypt, the IBAN consists of 29 alphanumeric characters, including two digits for the country code, two check digits, and the domestic bank account code.

Banks operating in the Egyptian market started to send messages to their customers with information on the IBAN code at the end of last week. Customers can also communicate with customer service of their banks or use Internet banking to obtain their IBAN code.

In May 2020, the Central Bank of Egypt (CBE) announced it has registered with the Society for Worldwide Interbank Financial Telecommunication (SWIFT) for the implementation of the IBAN. This comes in accordance with the approval of the International Organization for Standardization (ISO), making Egypt the 77th country to adopt this numbering system.

Amany Shams Al-Din, Deputy Governor for the Banking Operations Sector at the CBE, said the IBAN was originally adopted by the European Committee for Banking Standards (ECBS). It was introduced to facilitate payments within the European Union (EU), and later as an international standard under ISO.

She added that several other countries have implemented this system, mainly in the Middle East, such as the UAE, Jordan, and Kuwait.

The IBAN facilitates faster and more accurate processing of financial transactions, which reduces errors and avoids delay in making payments, Shams Al-Din added.

She elaborated that the IBAN is a standard international numbering system developed to identify an overseas bank account. The number starts with a two-digit country code, then two check numbers, followed by code of the bank, customer’s current account number, the bank branch, and the account type.

Every customer shall have a certain IBAN for each bank account of his own. She noted that the IBAN for bank customers in Egypt consists of 29 characters.

The CBE has organised several workshops with all banks in Egypt to prepare for the application of the new system. It also issued directives to those banks to start using the IBAN and notify their clients, in preparation for fully applying the system before the end of June 2020. Shams Al-Din noted that customers can obtain an IBAN of their own by contacting their banks.

Shams Al-Din emphasised that the IBAN will increase the accuracy and effectiveness of banking transactions and the speed of carrying out internal and external financial transfers without human intervention, which contributes to maintaining the confidentiality of information, as well as reduces operational risks.

Meanwhile, the Export Development Bank of Egypt (EBE) has started providing the IBAN service for its customers, saying in a statement that the step comes in line with the CBE’s instructions. The bank added that the new system will provide advanced and diversified banking services in line with the mechanisms of the modern banking market.

In this context, the EBE notified its customers and invited them to visit the nearest branch to receive their IBAN.

EBE Chairperson Mervat Sultan said the IBAN will be easily provided to customers upon their visiting the nearest bank branch or by contacting the bank’s call centre. The IBAN number will be also included in the electronic or printed bank statements, starting 30 June 2020. It will be obligatory to use the IBAN for any domestic or international transfers, to and from various bank accounts.

Sultan explained that the IBAN is recognised by all banks and financial institutions around the world, and it is a standard way to define a bank account.

Starting from 30 June, all bank transfers will require an IBAN number, while the personal account number will remain as it is. IBAN can be used to transfer money both inside and outside Egypt, with no transfers being accepted without an IBAN.

The Industrial Development Bank (IDB) announced on its social media accounts that it has launched its IBAN service, in implementation of the CBE’s decision. The bank explained that the IBAN was originally implemented in Europe, but its practicality made it international applicable.

IBAN works to facilitate the processing of customers’ financial transactions to avoid operating errors. It also makes it easier for the sending bank to verify the validity of the receiptor’s account number, in order to avoid refunding transactions due to wrong account numbers, which take a lot of effort and time to correct.

Maged Fahmy, Chairperson and Managing Director of the IDB, said the service was made to keep pace with the latest international payment systems.

Fahmy highlighted the advantages of using IBAN to make banking transfers, both locally and internationally. It ensures high security, as the alphanumeric characters make fraud impossible.

He added that speed is another advantage of using the IBAN system, to avoid disrupting or delaying transfers. Once the IBAN number is entered, a message will appear on the screen indicating that this number is correct and the transfer can be made at the same time. IBAN also ensures accuracy, making errors highly unlikely.

Fahmy noted that the IBAN system does not mean the customer’s account number will no longer be used, as the IBAN code includes the account number. It will be available in all bank statements and banking channels, he added.

IBANs would best be used when any financial transaction is made, whether inside or outside Egypt, according to Fahmy.

It can be provided to customers by visiting the nearest bank branch or by contacting the bank’s call centre. The IBAN number will be also included in the electronic or printed bank statements, Fahmy said.

He added that customers can check in advance the validity of the receiptor’s bank account, regardless of his bank, and thus verify that the transfer is made correctly with no mistakes.

According to Fahmy, the use of the IBAN number will contribute positively to preventing rejected or refunded transfers from banks, and will also enhance the efficiency of the money transfer procedures.

Bank Audi – Egypt has announced its activation of the IBAN system to facilitate all internal and external banking transactions for customers. It pointed out that this system is characterised by accuracy and speed at a lower cost.

Mohamed Bedir, the bank’s Managing Director, said that the implementation of the IBAN system comes in line with CBE’s plan to support the financial inclusion in Egypt.

He explained that customers can learn more on their new IBAN numbers through their periodic bank statements, or through visiting the nearest bank branch. Bedir noted that no transfers will be made without an IBAN starting from 30 June 2020.

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https://dailyfeed.dailynewsegypt.com/2020/07/04/banks-in-egypt-switch-to-iban-standard-to-ease-cross-border-transactions/
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