IBAN vs SWIFT, IFSC Codes Differences & Uses !!

There are two internationally recognized, standardized methods of identifying bank accounts when a transfer is being made from one country to another: the International Bank Account Number (IBAN) and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) code. The difference between the two methods lies in what they identify.

A SWIFT code is used to identify a specific bank during an international transaction, whereas IBAN is used to identify an individual account involved in the international transaction. Both play an essential role in the smooth running of the international financial market.

The SWIFT system pre-dates attempts to standardize international banking transactions through IBAN. It remains the method by which the majority of international fund transfers are made. One of the main reasons for this is that the SWIFT messaging system allows banks to share a significant amount of financial data.

This data includes the status of the account, debit and credit amounts, and details related to the money transfer. Banks often use the bank identifier code (BIC) instead of the SWIFT code. However, the two are easily interchangeable; both contain a mix of letters and numbers and are generally between eight and 11 characters in length.

Key Differences Between SWIFT code and IFSC code.

The important differences between SWIFT code and IFSC code are mentioned below:

1.            SWIFT Code is an acronym for Society for Worldwide Interbank Financial Telecommunication Code. IFSC code is short for Indian Financial System Code

2.            SWIFT code is a globally recognized code, used at the time of international credit transfer between banks and also when there is an exchange of messages between banks. IFSC Code is a unique identification code of a bank-branch used for the purpose of digital money transfer.

3.            The SWIFT code is approved by the International Organization for Standardization (ISO) Conversely; IFSC code is developed by Reserve Bank of India (RBI).

4.            Only those banks can take part in an international wire transfer, which is SWIFT code enabled. As opposed to, IFSC code is provided to all the Indian bank branches.

4.The SWIFT code consists of 8 or 11 characters. Unlike IFSC code, that consists of 11 characters.

 6.           In international money transfers (SWIFT code) the fees charged is higher as compared to national transfers (IFSC code).

7.            You can find SWIFT code on the bank’s website or the account statement while IFSC code can be found in Bank-branch cheque book and RBI website.

Prepared by M.Ajmal Khan.