What is SWIFT Code (BIC)? Why is it important?

• SWIFT stands for Society for Worldwide Interbank Financial Telecommunications.
• It is a messaging network that enables financial institutions to communicate securely with each other.
• The SWIFT code is a unique code that identifies financial institutions in cross-border fund transfers. It comprises eight or 11 characters in a standard format.

These days, remitting funds to a foreign account has become as simple as sending funds to a domestic account. As innovative technology continues to facilitate quick communication across borders, it has also made it easy to transfer funds abroad.Just like you need an IFS (Indian Financial System) code for domestic transactions, the SWIFT code is necessary for international transfers. In this blog, you'll learn about the SWIFT code, the SWIFT code finder, why it is needed, and much more.

The Society for Worldwide Interbank Financial Telecommunications, also known as SWIFT, is a secure messaging network. It enables financial institutions across countries to transmit messages for initiating and confirming cross-border financial transactions. Several financial institutions across various countries use SWIFT to securely communicate with each other.On the other hand, the bank account SWIFT code is a unique code for identifying financial institutions during an international fund transfer. It ensures a safe and secure execution of financial transactions. Also Read: How To Send Money from India To The World?

Let's assume you want to transfer money to your friend residing in the UK. You will need the details of your friend’s bank account there, to which you want to send the funds, including their bank account SWIFT code. Once you have the relevant information, share it with your bank in India to remit the funds overseas.Alternatively, you can use the foreign outward remittance platform, which is generally available through your net banking account. Simply add the beneficiary and provide the relevant details to submit the fund transfer request.Your bank will transfer the funds and notify the UK bank about the transfer over the SWIFT network.

The SWIFT code is also known as BIC, i.e. the Business Identifier Code, and comprises 8 or 11 characters. It serves as a primary identifier of a financial institution using the SWIFT. The code is unique and in a specific format.Let’s decode bank account SWIFT code to understand it better:

• The first four characters stand for the financial institution.
• The next two, i.e. the fifth and sixth characters indicate the country.
• The seventh and eighth characters represent the city.
• Finally, the last three characters are optional and stand for the individual branch.

Here’s an example - Suppose the code for HSBC Bank in London is HBUKGB4B. In that case:

• The first four characters, i.e. 'HBUK' stand for HSBC Bank.
• The next two characters, i.e. 'GB' means the United Kingdom.
• The seventh and eighth characters, i.e. '4B' are the location code for London.

The bank account SWIFT code is necessary for cross-border payments mainly for three reasons, which are:

• Enabling Secure Execution of Transactions : SWIFT implements data encryption and decryption techniques for safe and secure cross-border money exchange.
• Surpassing Geographic Boundaries: Geographic boundaries are no longer a hindrance. You can send money overseas in a hassle-free manner with strong security measures.
• Facilitating Prompt International Money Transfer: You can transfer money abroad to banks thousands of miles away. The transfer usually takes place in a few business days. Check with your financial institution for more details.

You can send money overseas by submitting the necessary details, which generally include:

• Full name and address of the beneficiary
• Beneficiary’s bank account number
• Name and address of the beneficiary’s bank
• Bank account SWIFT code
• Amount of transfer and its currency
• The reason behind the transfer

The code is generally available on a bank's official website under international transfers or similar options. You can also find the code on your bank statement or through your online banking profile. In case you get stuck somewhere, reach out to the customer care team for guidance.Apart from the options mentioned above, you can also explore a SWIFT code finder or similar tools online to know the applicable code.

Like the bank account SWIFT code, IBAN, i.e. International Bank Account Number, is also necessary for cross-border financial transactions.While the bank account SWIFT code is the primary identifier of the financial institution, IBAN is an identifier of the individual bank accounts party to the international financial transactions.

The ability to send money across geographies makes it easier to fund your friends and family during times of need. Moreover, if you are a businessperson, seamless cross-border transactions boost your business operations, just like a business loan fuels growth.A business loan turbocharges your business and gives you the support needed to expand your footprints. Choose a business loan that can align with your unique needs and help your business function more effectively and smoothly.