Somalia adopts IBAN system in a first to ease bank account validation

GOOBJOOG NEWS|MOGADISHU: Commercial banks in Somalia will now easily validate bank account numbers electronically following the adoption of the International Bank Account Numbers (IBAN)

The Central Bank of Somalia announced on Tuesday that all banks in the country had adopted IBAN across all transactions going through the National Payment System (NPS). The NPS is a system which allows interbank transactions cutting off the hustle of having to manually move money from one bank to another. The CBS rolled out the NPS in 2021.

The Bank said the adoption of IBAN will enhance performance in payment processing and reduce operational risks for bank transactions by enabling NPS to electronically validate bank account numbers and to choose the route a payment must take without manual involvement.

The IBAN system also reduced delays in international transfers originating from IBAN-compliant countries to Somalia.

CBC Governor Abdirahman Abdullahi hailed the adoption of IBAN as yet another milestone in reforming the bank to meet international standards. “We are proud to bring Somalia into the SWIFT IBAN registry. It reflects the determination of our staff and leadership to develop the financial sector of the country.

IBAN delivers significant advancement for our banks, and we hope this will help restore the assurances of international correspondent banks, regulators, and investors with regard to Somalia’s reintegration into the international financial market, CBS said.

While the Society for Worldwide Interbank Financial Telecommunication (SWIFT) identifies banks through the allocation of unique codes, IBAN system identifies individual bank holders by assigning them unique codes.

Bank account holders in Somalia received IBAN numbers as of last week.