About IBAN in Saudi Arabia
About IBAN
The SARIE system, which has been in operation for over 11 years, has been the catalyst for the growth in electronic payments processing systems in the Kingdom. The volume of customer payments processed through the central SARIE system has grown significantly during that period.
Commercial banks in the Kingdom have developed a variety of electronic payments systems, linked to SARIE. This has led to high levels of automated processing of payments by the banks. However, the level of Straight-Through-Processing (STP) being achieved for Inward Customer Payments is currently lower than might be expected. The absence of a common account numbering standard across all commercial banks in the Kingdom has been identified as the primary cause for these lower than desired STP rates. This is causing an obstacle to the further automation of payments processing by banks.
The present account numbering structure in use in the Kingdom was introduced originally to cater for Check Clearing. Individual banks were permitted to choose their account numbering systems based on their own business and technical requirements. Account numbers in use today range from 7 to 18 digits with banks having their own structures and formulae.
The International Bank Account Number (IBAN) standard published by the International Standards Organisation (ISO) provides a mechanism for introducing a common account numbering standard in Saudi Arabia without the need for banks to make changes to the basic account number or the bank's accounting system(s). It involves the inclusion of additional characters before the basic account number enabling the validation of customer account numbers by other banks and customers with benefits accruing for both domestic and cross-border payments.
The IBAN introduced in the Kingdom in a well planned and controlled manner starting from 1st July 2008.
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