Shaikh Salman bin Isa AlKhalifa, Executive Director for Banking Operations told a Press Conference on Monday that the initiative to make Bahrain’s commercial banking operations IBAN compliant would be up and running from Tuesday, making Bahrain the 4th GCC nation to switchover to IBAN transactions system.
Shaikh Salman, who was joined by Ahmed Buhijji Director of the Banking Service Directorate of the Central Bank of Bahrain and a panel of representatives of the commercial banks operating in Bahrain, said that the IBAN would help in minimising the time as well as minimal chances of mistakes during the inter-bank transfers and individual transactions.
This means a person wishing to make a payment or receive funds, both, locally and internationally, has to provide the recipient’s IBAN and not the existing bank account number. Any party expecting to receive a payment has to provide the IBAN to the sender of the payment.
Bahrain currently handles over 1483 transactions worth BD34.5 million a day will see switching over to the IBAN on Tuesday which is mandatory and required by the CBB to be 100% functional by initially 29 commercial banks and entities.
The IBAN is required by the law that all transactions should be held under the new account numbers allocated by the banks to their customers from 31st January onwards.
CBB requires from 31st January 2012, all bank customers in Bahrain need to use an IBAN when making or receiving electronic payments through banks within Bahrain or overseas.
IBAN is basically an account number, which is created using the international ISO standard for numbering bank accounts.
“The IBAN is specially designed to identify a bank account locally as well as internationally. Furthermore, the IBAN standard contains a mechanism to check the accuracy of the IBAN of the recipient. All these features reduce errors when writing the account number of the recipient and thereby minimizing delays in processing fund transfers,” Ahmed Buhijji, Director of the Banking Service Directorate of the Central Bank of Bahrain, said.
The each 14-digit IBAN comprises unique features of the information which will largely minimise the chances of mistakes, duplication and delays during the fund transfers.
Bahrain has also become the 6th Arab nation to introduce this initiative as part of its commitment to keep abreast with the best banking and financial services.