Do you want to receive payments from foreign countries? And you do not want to go to banks or remittance companies to withdraw the received amount and you wish, if you could receive payment directly to your bank account without any problems, without going to banks, then yes, it is possible to do so by using wire transfer with the help of SWIFT codes.
International transactions are very much important for Nepalese as many youngsters work as freelancers for international companies and many want to receive payment from companies such as Google AdSense, Amazon Kindle, Payoneer, etc, directly into bank accounts where SWIFT code plays an important role in facilitating these transactions. The international online payment gateways such as PayPal, Skrill, etc are not available for Nepalese as well as there is difficulty in getting international cards for Nepalese, wire transfer is the only option that can be relied on in Nepal.
So let’s understand what is SWIFT code, how it works, Nepali Bank’s SWIFT codes to receive payment and many more things about the SWIFT codes:
List of SWIFT codes of Nepali banks:
|Name of Bank||BIC/SWIFT
|ACE DEVELOPMENT BANK LIMITED||ACDENPKA||KATHMANDU|
|AGRICULTURAL DEVELOPMENT BANK LTD||ADBLNPKA||KATHMANDU|
|BANK OF KATHMANDU LIMITED||BOKLNPKA||KATHMANDU|
|CENTURY COMMERCIAL BANK LIMITED||CCBNNPKA||KATHMANDU|
|CITIZENS BANK INTERNATIONAL LIMITED||CTZNNPKA||KATHMANDU|
|CIVIL BANK LIMITED||CIVLNPKA||KATHMANDU|
|EVEREST BANK LTD||EVBLNPKA||KATHMANDU|
|GLOBAL IME BANK LIMITED||GLBBNPKA||BIRGUNJ|
|GRAND BANK NEPAL LIMITED||DCBNNPKA||KATHMANDU|
|HIMALAYAN BANK LTD.||HIMANPKA||KATHMANDU|
|JANATA BANK NEPAL LIMITED||JBNLNPKA||KATHMANDU|
|KASTHAMANDAP DEVELOPMENT BANK LTD||KDBLNPKA||KATHMANDU|
|KIST BANK LIMITED||KISTNPKA||KATHMANDU|
|KUMARI BANK LTD||KMBLNPKA||KATHMANDU|
|LAXMI BANK LIMITED||LXBLNPKA||KATHMANDU|
|LUMBINI BANK LIMITED||LUBLNPKA||KATHMANDU|
|MACHHAPUCHCHHRE BANK LIMITED||MBLNNPKA||KATHMANDU|
|MEGA BANK NEPAL LIMITED||MBNLNPKA||KATHMANDU|
|NABIL BANK LIMITED||NARBNPKA||KATHMANDU|
|NEPAL BANGLADESH BANK LIMITED||NPBBNPKA||KATHMANDU|
|NEPAL BANK LIMITED||NEBLNPKA||KATHMANDU|
|NEPAL CREDIT AND COMMERCE BANK LTD.||NBOCNPKANRD||KATHMANDU|
|NEPAL CREDIT AND COMMERCE BANK LTD.||NBOCNPKA||KATHMANDU|
|NEPAL INVESTMENT BANK LTD.||NIBLNPKT||KATHMANDU|
|NEPAL RASTRA BANK||NRBLNPKAFED||KATHMANDU|
|NEPAL RASTRA BANK||NRBLNPKA||
|NEPAL SBI BANK LTD. KATHMANDU||NSBINPKA001||KATHMANDU|
|NEPAL SBI BANK LTD. KATHMANDU||NSBINPKA||KATHMANDU|
|NIC ASIA BANK LIMITED||NICENPKA||KATHMANDU|
|NMB BANK LTD||NMBBNPKA||KATHMANDU|
|PRIME COMMERCIAL BANK LTD||PCBLNPKA||KATHMANDU|
|RASTRIYA BANIJYA BANK||RBBANPKA||KATHMANDU|
|SANIMA BANK LIMITED||SNMANPKA||KATHMANDU|
|SIDDHARTHA BANK LIMITED||SIDDNPKA||KATHMANDU|
|STANDARD CHARTERED BANK NEPAL LIMITED||SCBLNPKA||KATHMANDU|
|SUNRISE BANK LIMITED||SRBLNPKA||KATHMANDU|
|TOURISM DEVELOPMENT BANK LTD.||TDBLNPKA||KATHMANDU|
What is a SWIFT code?
A SWIFT code is an international bank code that is used to send money to overseas banks and identifies particular banks worldwide. It is also known as a Bank Identifier Code or Bank Identification Code (BIC). The full form of SWIFT Code is the Society for Worldwide Interbank Financial Telecommunication Code.
SWIFT is a messaging network that communicates between banks and various other financial institutions to securely, instantly and accurately, send and receive information about transactions, such as money transfer instructions.
The SWIFT codes are a combination of various kinds of letters and are unique for each bank. These SWIFT codes are used as Bank Identifier Codes (BIC).
A SWIFT code is used to identify a particular branch of any financial institution such as banks. It plays an important role in bank transactions, especially during international transactions. The main purpose of the SWIFT code is to help the banks to communicate.
SWIFT as an organization was founded in 1973 in Brussels to establish some common processes and standards for financial transactions to make international transactions smoother.
It must be remembered that BIC codes and SWIFT Codes or SWIFT IDs are the same thing and can be used interchangeably. The SWIFT code is almost like a postcode for your bank which ensures that your money goes to the correct address. The different names for SWIFT codes are simply given by different banks and financial organizations.
These codes are usually used during international bank wire transfers. However, these codes will make you pay a higher rate which depends on the ongoing rates at the time of the transaction. Currently, there are more than forty thousand live SWIFT codes worldwide.
How many digits is a SWIFT code?
Each financial organization has a unique code provided by the SWIFT organization that has either eight characters or 11 characters. SWIFT code is interchangeably called the Bank Identifier Code or Bank Identification Code (BIC), SWIFT code, SWIFT ID, or ISO 9362 code.
Let’s assume a bank having following SWIFT code: PPPPQQRRSSS
PPPP – The first four characters of SWIFT code denote the bank name which looks like a shortened version of the bank’s name.
QQ – The second two characters denote the country code telling you which country the bank is in.
RR – The third two characters denote the location code telling you where the bank’s head office is located.
SSS – The last 3 characters of SWIFT code denotes the branch code (which is optional) telling you where the specific branch is located.
As some banks don’t use the last three characters of branch code, they’ll have a shorter code with just 8 characters SWIFT or BIC code. For these banks, the branch code can be replaced by a triple X (i.e. PPPPQQRRXXX) or can be left off entirely. And some banks use branch code so SWIFT codes can be of 11 characters if used triple X or the regular branch code.
How does SWIFT code work?
The standardized communication system which is used with members of SWIFT regulates every message to follow their standard regulations. Any message which doesn’t comply with the standard of SWIFT is put on hold for verification, and most likely rejected. It has almost a military-grade security and its messaging system is secure which is designed to be unbreachable.
To communicate with members, there are SWIFT codes which are composed of eight to eleven alphanumeric characters.
It can be assumed that the SWIFT network works like an international flight which is a bit like traveling from one airport to another with some connecting flights from cities to cities as it might not be possible to take a direct flight. This means in the SWIFT network, your money will travel from one country to another, but to do that there are often intermediary/correspondent banks involved.
The SWIFT network doesn’t transfer funds, but instead, it only helps to send payment orders using the SWIFT message format between bank accounts. SWIFT also standardized IBAN (International Bank Account Numbers) and BIC (Bank Identifier Codes) formats. SWIFT organization owns and administers the BIC system, which means that it can easily identify a bank and send a payment order there securely.
The transactions happen within the banks when the sender bank sends a payment order with all necessary details of the sender and the recipient bank account details, through the SWIFT system. Then the system will verify the details and confirm that the details came from the bank that has credentials to use the system.
After the system ensures the validity of the message, the payment order will then be sent to the recipient bank. The recipient bank as a member of SWIFT will take the message as legitimate and act on it as soon as possible. The recipient bank can then clear the funds and deposit them to the specified recipient’s account in the payment order.
The recipient bank can hold the payment order if there is something unusual in the recipient or payment order itself. This is just to verify the transaction, and SWIFT will have no more involvement. SWIFT already has confirmed the validity of the message that means the bank has indeed sent that payment order to the recipient.
There are numerous other different types of transactions that SWIFT can provide for financial institutions. Other than payment orders to individual and private accounts, SWIFT also performs payment orders for treasury markets and other public statements, such as from industries and syndications.
Let’s assume a customer of Nabil Bank in Dhangadhi wants to send money to his friend who banks at the Commonwealth Bank Of Australia, 367 Collins Street, Melbourne, Australia.
The Dhangadhi customer can walk into his Nabil Bank, Dhangadhi branch with his friend’s account number and Commonwealth Bank Of Australia’s unique SWIFT code for its 367 Collins Street, Melbourne branch.
Nabil Bank from Nepal will send a payment transfer SWIFT message to the Commonwealth Bank Of Australia, 367 Collins Street, Melbourne branch with the help of a secure SWIFT network. Once Commonwealth Bank Of Australia receives the SWIFT message about the incoming payment, it will clear and credit the money to the friend’s account in Australia.
The SWIFT network is just a powerful messaging system and it is important to learn that SWIFT does not hold any funds or securities, nor does it manage client accounts, it only helps banks all around the world to communicate in a secure and safe environment.
The 11 or 8 characters SWIFT code is the standard format standardized by ISO (International Organization for Standardization).
In the above example, we did a breakdown of imaginary SWIFT code, now let’s see the breakdown of a real SWIFT code of Commonwealth Bank Of Australia, 367 Collins Street, Melbourne branch.
Here is the SWIFT code of Commonwealth Bank Of Australia, 367 Collins Street, Melbourne branch: CTBAAU2S3FX
This SWIFT code is for the branch of “Commonwealth Bank Of Australia” in Australia. and can be broken down to four parts:
The first four characters: These 4 characters (“CTBA”) identify the bank (“Commonwealth Bank of Australia”). These four characters code is used to identify this particular financial institution’s branches and divisions all over the world.
Next Two Characters: These 2 characters are used to identify the country in which the bank is located. “AU” in this example means the country “Australia”.
Next Two characters: These 2 characters represent a location code (“2S”).
Last three characters: These last 3 characters of SWIFT codes are the branch code (“3FX”) which is used to identify the branch of Commonwealth Bank Of Australia. If the branch code is omitted or replaced by triple X (“XXX”), it will denote the head (primary) office of the Commonwealth Bank Of Australia.
Who uses the SWIFT network?
SWIFT was designed as the network to facilitate communication about Treasury and correspondent transactions only in the beginning. The powerful and fast service delivered by SWIFT through its message format design enables huge scalability through which SWIFT gradually expanded to provide services.
The SWIFT network or system is mostly used by banks, but it’s also used by different financial institutions and businesses, organizations which are listed below:
- Asset Management Companies
- Brokerage Institutes and Trading Houses
- Clearing Houses/Systems
- Corporate Business Houses
- Foreign Exchange
- Money Brokers
- Securities Broker-Dealers
- Treasury Market Participants and Service Providers
What is SWIFT for you?
If you want to do international transactions through your local bank, your bank must be affiliated with SWIFT, then the SWIFT network can be used to securely communicate between banks for a payment order and get your money from one place to another.
Things to Remember about SWIFT:
- If you choose wire transfer to send the payment order internationally using SWIFT, then fees are often charged by correspondent and recipient banks while using SWIFT for transactions.
- The transactions through SWIFT can take up to 5 working days in some instances.
- If you’re sending a smaller amount of money through SWIFT, then sometimes it can be quite costly. And if your SWIFT transaction will need to go through intermediary banks, each of them normally will charge their fee. Though, you get an option from most of the banks that whether you or the recipient or a combination of both will pay the bill for these additional fees, the costs will still add up.
- If your money will need to be exchanged for another currency, then banks can add their profit to the rate they offer you. A further cost. Or the banks may sometimes apply their exchange rates so you may receive a lesser amount.
- SWIFT is just one of the organizations and networks that has become successful in changing modern banking forever. And it’s worth learning about it to make sure you know what you’re getting while doing transactions through SWIFT.
- SWIFT doesn’t hold the payment, it only helps banks to communicate for transactions and other services.
What is the SWIFT network?
The SWIFT is a network that helps banks around the world to communicate for transactions and other services. As the world needed a consistent, standard, and universal way to get money from one country to another. The SWIFT network provides that system for secure communications between banks around the world.
SWIFT has been providing a secure network for the financial institutions of 212 different countries, where the number of financial institutions affiliated to SWIFT is more than 10,000. The SWIFT network helps the financial institutions and banks to send and receive information about financial transactions in a secure environment.
Before the existence of the SWIFT network, there was another system named TELEX in which banks and financial institutions relied on to make money transfers. The TELEX system was slower, and the system of TELEX lacked security which has been a necessity of a time when technology was making rapid progress. So a robustious system SWIFT became a standard and consistent system for banks and financial institutions around the world.
Is a SWIFT code the same for all branches?
No, every branch has a unique code. Each member of the SWIFT gets a unique code to identify different branches of different banks. No codes are similar to other branches even of the same bank, as the system ensures that they are distinct from each other. Other than verifying bank codes, SWIFT also certifies its members only after strictly checking its legitimacy to ensure that all transactions are made by genuine banks.
However, the banks with no branches as well as the head office can use 11 characters SWIFT code in place of 8 characters SWIFT code, an example of it is, the head office of Nabil Bank’s SWIFT code is “NIBLNPKT” with 8 characters and this can be replaced with triple X (XXX) at the place of branch code which will look like this “NIBLNPKTXXX” with 11 characters, these both will denote the head office of the institution.
In Nepal, most of the bank only uses head branch SWIFT code which is only of 8 characters that can be replaced by 11 characters SWIFT code with triple X and if available, branch code can be used in place of triple X. When you use the head office SWIFT code, the payment will be sent and cleared from the head office to your branch account.
Can I transfer money without the SWIFT code?
No, you cannot send money without the SWIFT code directly to the recipient bank account. You need to know the SWIFT code of the recipient’s SWIFT code and account number for the transactions. Although, there are other methods in different countries for the transactions they are limited to a few countries and regions, and not available worldwide.
Only the SWIFT network is available worldwide and serves in 212 different countries with more than 10,000 financial institutions affiliated to it. As of 2018, around half of all high-value cross-border payments worldwide used the SWIFT network for transactions.
Alternatives to the SWIFT system include:
Ripple – sponsored by crypto firm Ripple Labs
INSTEX – sponsored by the EU
CIPS – sponsored by China
SPFS – sponsored by Russia
But these alternatives are not available worldwide so it’s almost impossible to replace SWIFT soon with any other. There are other options such as ABA (bank routing number) which is only used by the US banks. Therefore, only the SWIFT code is the global standard for international transactions.
However, if you want to directly transfer money without SWIFT code, you can use international prepaid cards for transferring funds online. This method doesn’t require the recipient’s account number and cards can be used for receiving payments.
Is the SWIFT code required for a wire transfer?
Yes, SWIFT code is required for international wire transfer, however, you can do domestic wire transfer without a SWIFT code within your own country.
There are various other different organizations within a country or region to ease the process of wire transfer without using SWIFT codes such as Clearinghouses, Western Union, other remittance services, etc. But in most of the wire transfer which is carried at an international level involving banks, SWIFT code is necessary for transactions.
What are the Services Offered by SWIFT?
The SWIFT system offers various services that help individuals as well as businesses to complete the transactions in a safe, secure, reliable, and seamless environment accurately without making any possible errors. The services offered by SWIFT includes:
SWIFT gives access to different applications, which consists of real-time instruction matching for treasury and forex transactions, securities market infrastructure for processing clearing, settlement instructions for payments, securities, forex, and derivatives transactions and banking market infrastructure for processing payment instructions between banks.
- Messaging, Connectivity, and Software Solutions:
The heart of SWIFT business remains in providing a secure, reliable, scalable, and robust network for the smooth transmission of messages. SWIFT delivers multiple products and services which enable its end clients to send and receive transactional messages securely through its different messaging hubs, software, and network connections.
- Business Intelligence:
SWIFT has newly launched dashboards and reporting utilities that simplify the clients to get a dynamic and real-time view to regulate and monitor the messages, activity, trade flow, and reporting. The reports help in filtering based on region, country, message types, and related parameters.
- Compliance Services:
The compliance services are Aimed at services around financial crime compliance. Know Your Customer (KYC), Sanctions, and Anti-Money Laundering (AML), etc utilities and reporting are also facilitated by SWIFT.
Why is SWIFT Dominant?
SWIFT is dominant because of the robustness and security that it offers to help the financial institutions communicate. The membership of SWIFT increased at a rapid rate in a short time. Though there were other older and newer services like TELEX, Fedwire, Ripple, and CHIPS, SWIFT has been able to continuously retain its dominant position in the market. Its success can be known as how it has been adding new message codes to transmit different financial transactions.
Although SWIFT was primarily started for simple payment instructions, now it sends messages for various purposes, such as security transactions and treasury transactions. Almost 50% of SWIFT traffic is used by payment-based messages, and now 47% of traffic is used by security transactions, and the remaining traffic flows to treasury transactions.
How Does SWIFT Make Money?
SWIFT is a cooperative society organization owned by its members. The members of the SWIFT organization are categorized into different classes based upon their share ownership. Every member of SWIFT has to pay a one-time joining fee as well as annual support charges which varies according to member classes. Users are also charged by SWIFT for each message based on the message type and its length. The charges may also vary upon the bank’s usage volume as it can be different for banks that use SWIFT for different volumes of messages. There exist different charge tiers for banks depending upon usage volume in SWIFT.
SWIFT also has launched some additional services which are powered by the long history of data maintained by SWIFT which include business intelligence, reference data, and compliance services as well as offer other income streams for SWIFT.