SWIFT Code is identified as the Business Identifier Codes or BIC code that has been approved by the ISO. This SWIFT Code has a pre-defined standard format as per the ISO 9362 and the code is unique to electronic funds transfer and includes both the financial and non-financial institutes. SWIFT acronym Society for Worldwide Interbank Financial Telecommunication has been designated as the BIC registration authority by ISO.
When this code is assigned to the non-financial instituted, we call it Business Entity Identifier, BEI. These codes are basically used for money transfer between two banks, the bank of America swift code for incoming wire transfers in US dollars, and for the exchange of many other types of messages between the banks. One can easily find this code on the account statements.
Do you know one bank can use different identifiers to separate their activities? Taking an example of Bank of America Swift code. In the United States, SWIFT code for the denominated wires is BOFAUS3N and for the wires that are sent in any other foreign currency, SWIFT code is BOFAUS6S.
As such there is no specific hard and fast format of the SWIFT code. For example, in the case of Euro Payments, European central bank has agreed upon the common format that is based on the IBAN and BIC plus an XML-based format for transmission and starting a standardized transaction.
Structure of SWIFT Code
The SWIFT code is an 8/11 characters code with the first 4 letters representing the code of the Institute or the bank code, next 2 letters as per ISO 3166-1 represents the country code, and last 2 letters in the case of 8 digit Swift code are the location code. Few things to consider in the 8-digit code:
- If the last character is a “0”, that means BIC is testing this code on another BIC live network.
- If the last character is a “1”, that means the user is passively participating in the SWIFT network
- If the last character is a “2”, that means reverse billing BIC, here both the parties sender and the receiver will be asked to make some payment to send and receive the message.
For the 11—digit code, last 3 digits or letters represents the branch code and many times optional for the prime office code 619. So, when any sender enters an 8-digit code, it is clearly understood that that code related to the primary office only.
SWIFT is a well-known division of Society for Worldwide Interbank Financial Telecommunication organization that is responsible for handling SWIFT codes and process related to the registration of a SWIFT code? SWIFT was originally introduced and a later modification changes it to BIC or Business Identifier Codes, often named by the SWIFT codes.
This ISO 9362 was updated in the year 2009 that allowed non-financial institutions to include SWIFT code.
As per the latest reports, there are around 7,500 SWIFT codes that are “live” codes and it has been estimated that over 10,000 BIC codes will be doing manual transactions only.