A SWIFT code, which is sometimes called a SWIFT number, is a unique code that consists of different letters used to identify financial institutions and banks globally. This code helps to know the country, bank, and branch an account is registered to. This code is particularly useful when sending or receiving the money to a particular bank oversees, and you want to be sure that the funds go to the right place. SWIFT codes have been in use for more than thirty years, and they were introduced to assist banks and other financial institutions in communicating securely among themselves.
The word SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. It’s a global network. Almost all of the banks and financial institutes in the world are members of this network. Using the code, the banks under this network can make inter-bank global monetary transactions easily.
BIC and SWIFT Code
SWIFT codes are generally used as Business Identifier Code (BIC), a standard (ISO 9362) defined by the International Organization for Standardization, to identify different branches of banks. SWIFT or BIC codes are unique codes, and these two terms are often used interchangeably. Every bank has its unique codes that are used when transferring funds between banks, especially in international money transfers. Besides, banks also use the codes to exchange messages.
BIC consists of 8 or 11 characters. The code does not contain hyphens or spaces, and it has three portions. The first four characters are the bank code that represents the bank’s name. The next two are the country code that represents in which country the bank is located in and the last two characters represent the location.
11-characters code is generally the internationally accepted format for a BIC. The 8-character code represents the bank, its country, and the location of the head office. Similarly, in the 11-characters code, the last 3-characters represent the branch code. As the head offices don’t have any branch code, “XXX” is used with the 8-character code to make it an 11-characters code.