Can my bank still require a BIC code for credit transfers within the SEPA zone?

Question

As far as I know the "IBAN Only rule" which was recently adopted states that for credit transfers within the SEPA zone, an IBAN is sufficient to identify an account and the BIC is no longer required. I've found an article explaining IBAN and BIC which mentions the change and there are more specifics on the "IBAN Only rule" on this article from the same site. This and other sources all indicate that the IBAN only rule should have been in effect for months now.

But I just discovered that a recent transaction was refused by my new bank because the BIC, which I left empty, didn't validate. The fine print on the digital transfer form says this about the BIC code: "this field is optional for SEPA transfers within [country]". My previous bank correctly allowed me to leave the field empty. If it matters, the country of origin for the transfer is listed as using SEPA Credit Transfers for 100% of all credit transfers within the zone.

Can my bank still require me to provide a BIC? Does the IBAN only rule not cover the end-user aspect? I was under the assumption that the more convenient and less error-prone user experience was the main point of this change.

If this does indeed violate the IBAN only rule, is that potentially a red flag about my bank's system? Should I be concerned that their implementation of other aspects of their system, such as security, is equally sloppy?

Answer 1

Can my bank still require me to provide a BIC? Does the IBAN only rule not cover the end-user aspect? I was under the assumption that the more convenient and less error-prone user experience was the main point of this change.

The IBAN only is still being implemented by quite a few banks. Internally the networks used still need BIC. Quite a few banks have upgraded their systems so that it makes it optional for end user, but internally populates the right BIC so that payment can be processed correctly.

If this does indeed violate the IBAN only rule, is that potentially a red flag about my bank's system? Should I be concerned that their implementation of other aspects of their system, such as security, is equally sloppy?

Without getting into specifics, your Bank may have taken an exception approval for a certain set of customers and/or applications where they would introduce IBAN only at a later point in time. As the regulation covers Sepa initiation and not SIWFT initiation, quite a few Banks can get away saying the system/screen is actually SWIFT initiation and internally this gets converted to SEPA so that its cheaper for customer. The IBAN only rule is not mandated for SWIFT initiations [even if these get converted to Sepa].

This is a complex change for Banks and some may have dealt with it, some may need more time. This alone does not reflect whether a Bank's technology is good or not. There are quite a few aspects to this.