IBAN (International Bank Account Number) is an international standard for bank account identification across national borders. It was developed by ISO (International Organization for Standards) and currently adopted by ECBS (European Committee for Banking Standards). IBAN was hoped to offer hassle-free money transfer between European countries and it is currently used to identify a specific account, to which a payment should be made. This standard is always used along with BIC (Bank Identifier Code).
In general, IBAN isn’t a new format for bank account number and instead a series of highly defined standard with certain structures. A common structure of IBAN is consisted of different alphanumeric characteristics, such as ISO country code, bank reference number, check digits, cheques number, sort code, account number and others.
Characters used by IBAN are 26 upper-case Latin characters between A and Z and numbers between 0 and 9. This applies even for countries with special characters, such as South Korea, Israel, Saudi Arabia and Greece. Character length of IBAN structure varies based on countries, for example, IBAN Norway only uses 15 characters, while Malta has 31 characters. The country code should allow use quickly identify the country, such as DE for Germany, BE for Belgium, BG for Bulgaria, DK for Denmark, ES for Spain, FI for Finland, EN for France, GR for Greece, IE for Ireland, IT for Italy, LU for Luxemburg, NT for Malta, NO for Norway, NL for Netherlands, PL for Poland, PT for Portugal, RO for Romania, GB for United Kingdom and SE for Sweden.
An example of IBAN structure for Lithuania is LT12 1010 0011 1000 01000, which is preceded by the country code (LT) and two check digits (12). Another is example is NO93 8601 2112 342, which is obviously an IBAN for Norway, with a country code (NO) and two check digits (93).
When ISO defined the structure of IBAN, one of its aims was to maximize the number of validations possible on a single point of entry. A highly computerized system will examine commonly accepted structure to perform the validation task, using the number of characters, BBAN format specified for a country code and the country code itself. During the validation process, it is also necessary for the combination of country code, bank code and account number to be compatible with check digits.
The system calculates check digit using a different standard, the MOD-97 (ISO 7064:2002) and it specifies a specific system used to protect string against likely errors, which may occur when IBAN is copied or transmitted electronically. Check digits is placed after the ISO country code and calculated from the rest of characters used by IBAN. In some cases, check digit is a constant for a specific country and this happens if BBAN also has its own check digits.
Sort code used in IBAN structure is used for internal purposes to a bank branch and can also be used to inform bank customers about the location of a branch. This should be a far better alternative than writing a full address.
If you want more details about the IBAN structure for each country, please visit our structures page.