Bank Identifier Code | Full form of BIC, Need and Benefits

What is a Bank Identifier Code?

A Bank Identifier Code (BIC), also known as a SWIFT code, is a unique alphanumeric code used in international financial transactions to designate a specific bank or financial institution. BICs are essential for international wire transfers and other cross-border payments because they ensure that funds are sent to the correct recipient bank. They are commonly termed as BIC, which stands for Bank Identifier Code.

Where is the BIC Code Located?

The Bank Identifier Code (BIC) or SWIFT code for a particular bank can typically be located in one of the following locations, depending on how you intend to access or share this information:

1. Bank Statements: If you have a bank statement from the organisation, the BIC or SWIFT code may be mentioned there. You need to look for a section that contains information about your account or transactions.

2. Online Banking: You can typically locate the BIC or SWIFT code for your bank by navigating to your account details or settings after logging into your online banking account. Typically, this information can be found in the account information section.

3. Bank’s Website: You may get the BIC or SWIFT code for a certain bank on their respective websites. You may find your bank’s international transaction, wire transfer, and contact information pages on their website. There might be a specific website listing BIC/SWIFT codes across multiple branches of the bank.

4. Online BIC/SWIFT Code Directories: You can find the BIC and SWIFT codes for banks all around the world by searching online databases and directories. If you need the routing number for a foreign bank, one of these directories may come in handy.

How to Use the BIC Code?

A Bank Identifier Code (BIC) can be compared to a country’s international ZIP code. Like a street address helps in the delivery of mail, a BIC helps in the delivery of international wire transfers by identifying the receiving financial institution. The BIC consists of three parts: the bank’s name, the bank’s nationality, and optionally, additional information about the bank’s location or branch. For this reason, the BIC of the recipient bank must be included in all international wire transfers. Using the correct address ensures that your letter reaches the intended recipient. International wire transfers are now safe and reliable thanks to BIC codes.

Bank Identifier Code must always be provided with caution, as entering and confirming the incorrect code could result in the financial transaction failing or the money being sent to an unauthorised recipient. Nowadays, the traditional BIC transfers have been replaced by TransferWise, which is smart, efficient, and enables real-time transactions.

Structure of BIC

A bank identification code is arranged as follows:

‘CBININBBCFD’

• ‘CBIN’ or the first 4 characters represent the bank. The first four characters are used globally to identify a particular bank.
• ‘IN’ : The 5th and 6th characters represent the country in which that particular bank is situated. “IN” stated in the above example would certainly mean India.
• ‘BB’ : It is the Location code.
• ‘CFD’ : CFD is denoting a branch code.

Need of BIC

The following factors demonstrate the importance of a Bank Identifier Code (BIC):

1. Makes Online Banking Transactions Easier : BIC is required for online banking apps to enable safe financial transfers between two banks on the SWIFT network.

2. Makes Recipient Identification Easy: It ensures that the sender supplies the recipient’s bank’s specific bank identity code in addition to their local bank account number, reducing mistakes in fund processing.

3. Facilitating Business Transactions: BIC serves an important role in facilitating numerous commercial activities, making it easier for enterprises to engage in international trading and investments.

4.Compliance with Statutory Requirements: BIC enables financial institutions and enterprises in meeting legal and regulatory obligations, ensuring that transactions comply with the required norms and rules.

Benefits of BIC

The Bank Identifier Code has the following benefits:

1. Safe and Secure: The use of a bank identity code for international money transfers is a safe and secure method. The participants’ funds are safe in these systems; users don’t have to worry about the security of their funds.

2. Real-Time Transactions: The use of a bank identifying code facilitates the quick completion of transactions by the involved parties. The system has been fully automated in order to minimize any unnecessary delays.

3. Cheaper: The Bank Identifier Code (BIC) system is fully automated, facilitating participants in avoiding additional fees and enabling international payments with improved clarity and convenience.

Difference between BIC and IBAN

Both SWIFT numbers and IBANs are widely used across the world to uniquely identify bank accounts during wire transfers. The needed identity varies by country and by the recipient’s financial institution.

Basis	IBAN	BIC
Definition	IBAN stands for International Bank Account Number.	BIC code a.k.a SWIFT stands for Bank Identifier Number
Purpose	Used to distinguish an individual bank account when making international transfers.	Used to identify a specific bank during an international transfer.
Example	AL35202111090000000001234567 : Albania	SBININBB354 Here, SBIN = Bank code, IN = Country code, BB = Location code, 354= Branch code
Primary use	IBAN numbers are solely used for bank transfers.	Since SWIFT has no upward limit on transfers, it is used by a variety of large institutions including Asset management firms, Brokerages/Exchanges and Corporate Businesses.

In a nutshell, the Bank Identifier Code is an essential element in the world of international finance and banking, offering a standardized secure means to identify banks, address correspondence, and conduct various financial transactions while complying with legal and regulatory frameworks.