IBAN/BIC
What is an IBAN?
IBAN (International Bank Account Number) is an international account number. Its use will become mandatory in the EU area and the EEA as of 1 January 2007. Most of the European countries not belonging to the EU have also adopted the IBAN.
An account number in the IBAN format can be identified by the two-letter country code at the beginning of the number sequence. The length of the IBAN varies from country to country. The Finnish IBAN is 18 digits long and it always begins with the country code FI.
What is a BIC?
A BIC (Bank Identifier Code) is a bank identifier. The length of a BIC is always 8 or 11 characters. The first six characters are always letters and the rest are letters and/or numbers.
You can deduct the beneficiary’s bank from the first four characters of a BIC and the bank’s country from the fifth and sixth character.
For example: Nordea Bank Finland’s BIC is NDEAFIHH and Nordea Estonia’s NDEAEE2X.
Where can I find IBANs and BICs?
You find your own IBAN on your account statement and in Netbank.
If you are paying an invoice or making some other cross-border payment, you can usually find the IBAN and BIC on the invoice form. If you cannot find them, ask for them from the beneficiary. Your own account bank cannot provide you with the IBANs of other banks’ customers or other banks’ BICs.
Why are IBANs and BICs obligatory?
In 2002 the European banks decided to harmonise payments in the EU area and the EEA. The obligatoriness of the IBAN and the BIC is based on decision no 092/05 by the European Payments Council (EPC). The decision in binding on all European banks including Finnish banks.
Both the European Commission and the European Central Bank support the formation of a common payment area by the Directive on Payment Services, which is under preparation.
When do I need IBANs and BICs?
Always use the beneficiary’s IBAN and the BIC of the beneficiary’s bank when you send payments to Europe irrespective of the payment currency. The decision of the EPC only concerns euro payments, but many banks return all payments without the IBAN and the BIC irrespective of the currency. Returning of payments causes unnecessary costs and exchange rate losses. Use the IBAN irrespective of the currency and always when the country where the beneficiary’s bank is located has notified that it has adopted the IBAN.
If you are expecting funds from abroad to your account in Finland, remember to inform the remitter of the payment of your IBAN and of Nordea’s BIC (NDEAFIHH). Payments from other European countries to Finland are not transmitted without IBANs and BICs.
The IBAN will be adopted in domestic payment traffic at a later stage.
If I pay a little more, can I send a payment without the IBAN?
Payments to the EU and EEA countries cannot be sent without the IBAN and the BIC. The sending bank’s responsibility is to reject the payments of its customers that do not have the required information.
Many banks return payments in foreign currencies, which lack the IBAN and the BIC. Nordea requires that all payments must have the IBAN and the BIC irrespective of the currency. This measure saves you from unnecessary costs. If payments are returned from abroad, costs and exchange losses are deducted from them.
Can I enter my IBAN and the bank’s BIC in the account transfer section of a domestic invoice?
As IBANs and BICs are not yet used in domestic payments, the account numbers in the account transfer section must be domestic.
Which countries belong to the EU and the EEA?
The following countries belong to the EU: Austria, Belgium, Cyprus, the Czech republic, Denmark, Estonia, Finland, France, Germany, Greece, Great Britain, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain and Sweden. Bulgaria and Romania will become member countries at the beginning of 2007.
Iceland, Norway and Liechtenstein are EEA countries.
Which countries use the IBAN?
List of countries using the IBAN
How should IBANs and BICs be entered in payment details?
IBANs and BICs are always entered without spaces and without the words IBAN or BIC.
