As part of the move towards a Single Euro Payments Area (SEPA) the European Payments Council (EPC) passed a resolution in June 2005 mandating the use of BICs and IBANs in all European cross-border credit transfers in Euros. This means that the BIC and IBAN are the only bank routing destination and beneficiary account identifier recognised by banks and are therefore the critical components in facilitating a successful crossborder credit transfer.
How will mandatory BIC and IBAN rules work?
Penalty and repair charges are now formalised
Handling a Euro cross-border payment where the beneficiary account is not identified using a valid BIC and IBAN may be chargeable by the receiving bank. This penalty charge may be passed back to the Originator.
From 1st January 2007 payments may additionally be rejected
A Euro cross-border payment must use a BIC and IBAN to identify the beneficiary account. In addition to applying penalty charges, banks receiving payments without a valid BIC and IBAN are also entitled to reject or return them.
For further information, please visit BANK WIZARD - BIC and IBAN validation and IBAN (International Bank Account Number) - an introduction