The International Bank Account Number (IBAN) is an international standard for identifying bank accounts across national borders in a way that would minimize the risk of propagating transcription errors. It was originally adopted by the European Committee for Banking Standards, and was later adopted as an international standard under ISO 13616-1:2007. The official IBAN registrar under ISO 13616 -2:2007 is SWIFT.

The IBAN was originally developed to facilitate payments within the European Union but the format is flexible enough to be applied globally. It consists of a ISO 3166-1 alpha-2 country code, followed by two check digits and up to thirty alphanumeric characters for the domestic bank account number (incorporating routing information), called the BBAN (Basic Bank Account Number). It is up to each country’s national banking community to decide on the length
of the BBAN for accounts in that country, but its length must be fixed for any given country.

Before IBAN, customers, especially individuals and small/medium businesses (SME’s), 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.

Furthermore routing information as specified by ISO 9362 does not contain check digits, so 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 incurred extra costs to the sending and receiving banks and often to intermediary banks also.

IBAN imposes a flexible but regular format sufficient for account identification and contains validation information to avoid errors of transcription. The standard IBAN now carries all the routing information needed to get a payment from one bank to another wherever it may be. IBAN contains check digits which 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 account numbers. Where used, IBAN’s have reduced trans-national money transfer errors to under 0.1% of total payments.

The check digits enable the sending bank (or its customer) to verify the validity of a routing destination and account number from a single string of data at the time of data entry. Thus routing and account number errors are virtually eliminated.

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, the last group being of variable length as shown in the example below

The characters that may be used in an IBAN are the Hindu-Arabic numerals ‘0’ to ‘ 9 ‘ and the 2 6 upper case Latin alphabetic characters ‘A’ to ‘Z’. This applies even in countries such as Greece, Saudi Arabia and others where these characters and/or numerals are not used in the national language.

All banks in Europe (except for the Commonwealth of Independent States) provide an IBAN identifier for their accounts as well as nationally recognized identifiers – this being mandatory within the European Economic Area. In addition, Kuwait, Lebanon, Mauritius, Saudi Arabia, Tunisia and Turkey also provide IBAN format account identifiers.

Some banks outside Europe may not recognize IBAN, though as time passes this is expected to diminish. Non-European banks typically accept IBAN’s as bank account numbers for accounts in Europe, although they might not treat IBAN’s differently to the way they treat other foreign bank account numbers. In particular, they might choose not to check that the IBAN is valid prior to sending the payment.

In the absence of an IBAN it remains necessary to use the current ISO 9362 Bank Identifier Code system (BIC or SWIFT code) in conjunction with the BBAN.

The IBAN implementation for the UAE closely follows the international implementation standards.
The IBAN for the UAE will be based on the following components.

Based on the above the IBAN for the UAE will be 23 bytes long. The pictorial below depicts the various components of the UAE IBAN.