BANK OF ALBANIA
Publication date: 22.05.2009
What is an IBAN
IBAN (International Bank Account Number) is an acronym, which stands for International Bank Account Number, a standard structure of bank account developed by ESCB (European Committee for Banking Standards) and ISO (International Organisation for Standardisation). IBAN is used as international bank information of uniquely identifying the account of a customer at a financial institution and it is currently implemented and employed in 46 different countries worldwide, mainly member countries of European Union as Croatia, Macedonia, Turkey, Serbia, etc. Information on Albanian IBAN is disclosed in IBAN International Registry, published by SWIFT in April 2009.
Use of an IBAN
The IBAN is a novelty in Albania imposed by the growing pressure to improve the efficiency of cross border payments, in regard to reduction of cost and speed in carrying out these latter as well as to increase service quality. This standard was initially created to solve the cross-border payments problem with the purpose the conduction of transfers between banks in different countries, but it may be implemented for the domestic payments, as long as banking sector in Albania does not implement any basic standard on the account number.
In Albania, IBAN shall be created on all holders' accounts at banks/branches of foreign banks being granted a license from the Bank of Albania and through which the transfers may occur, by replacing the current number of customer's account. All the domestic and cross-border payments (whenever IBAN is applicable), that are carried out through the payment system or the correspondent banks, shall take place from and in the customer's account, whose number shall contain an IBAN format.
IBAN primary/main advantage is providing the possibility for the automatic processing of accounts of each bank worldwide, mainly for the conduction of cross-border transfers. This implies the verification of correct registration of the account number, through a check digit set out aligned with an international standard procedure.
IBAN use in Albania encourages/stimulates a more productive banking system, with an improved payment system by:
- standardising the bank accounts numbers;
- identifying and validating the correctness of customers bank accounts;
- improving the service versus customer;
- automation of payments processing.
Stated differently, these objectives may be translated in time in:
- reduction of cost on the transfers conduction;
- speed in carrying out the transfers;
- reduction of human mistakes.
National implementation plan
The Supervisory Council of the Bank of Albania adopted in July 2008, the Regulation 'On the structure and use of International Bank Account Number (IBAN). The purpose of this Regulation is to set out the structure of international bank account number for use in the Republic of Albania (Albanian IBAN) as well as to lay dawn the procedures for the establishment, validation check and its use from banks and/or branches of foreign banks being granted a license by the Bank of Albania. Under the conditions when Albania does not have a (basic) national structure, IBAN implementation as national and international standard of bank account number, decreases the possibility of mistakes/omissions, for two reasons: (i) all the accounts numbers of customers in all banks shall contain a standard structure; (ii) all customers' accounts number in all banks, shall contain check digits which become assessed for correctness by each bank, according to the same standard, at the moment of transfer initiation at the sender's bank, as well as prior to its conduction at the beneficiary 's bank.
For a one-year period, banks in the Republic of Albania have provided the arrangement of internal systems for the establishment, validation, transmission and publication of IBAN during the financial processing of transactions. Banks have replaced the current accounts numbers with IBAN structure and have taken all measures to inform customers related to IBAN number, within June 1st, 2009.
Starting from 1 January, 2010, banks shall check IBAN validation of sender/beneficiary's account included in the payment instruction, either in electronic or paper format, of receiving the information on IBAN. The bank, in the event of concluding any incorrectness from the validation procedures, shall refuse to carry out the relevant payment. Ever since from this date, Albanian payment systems will control the validation of accounts included in the payment instructions and in the event of incorrectness shall refuse the related payment orders.
Customers ' role
Due to the fact that after January 1st, 2010, banks shall require their customers the obligatory use of IBAN, it is important to highlight the indispensability of public awareness on the use of IBAN.
If within June 1st, 2009 all the banks' customers, individuals or businesses that hold a bank account either in LEK or foreign currency at one or more banks in Albania, have not received any notification in writing from the bank, then they should appear at the respective bank's windows to acquire the IBAN number and its use.
Banks should inform their clients on:
- the importance of the correct use of IBAN and BIC code, to provide the automatic processing of transfers;
- ways how the 'funds' receiver' customer should inform all the senders of funds, that may be individuals or businesses in the country or abroad, related to respective IBAN and BIC code of the bank;
- use of international payment instructions.
Structure of Albanian IBAN
Albanian IBAN contains 28 digits: 2 letters - country code 'AL' + 2 number - 'check digits' + 8 number- bank/branch identifier code 'BIC' + 16 characters - current account number of a holder. Albanian IBAN in paper format shall be disclosed as: IBAN AL47 2121 1009 0000 0002 3569 8741.