The Central Bank of Somalia (CBS) has begun enforcing the use of international bank account numbers (IBAN) by commercial lenders, effective March 27, as part of a series of financial sector reforms aimed at integrating the nation into the global payments system.
The banking regulator on Tuesday termed the latest development as another ‘progressive milestone’ in its quest to transform Somalia’s financial sector.
“We are proud to bring Somalia into the IBAN registry. It reflects the determination of our staff and leadership to develop the financial sector of the country. This is a big achievement for the entire CBS team,” CBS Governor Abdirahman Abdullahi said.
“IBAN delivers significant advancement for our banks, and we hope this will help restore the assurances of international correspondent banks, regulators and investors with regards to Somalia’s reintegration into the international financial market.”
Successfully adopted by banks
In a statement released on Tuesday, the regulator said the use of IBAN across all transactions going through Somalia’s National Payment System (NPS) have been successfully adopted by all banks in the country.
The move is expected to enhance performance in payment processing and reduce operational risks for bank transactions by enabling NPS to electronically validate bank account numbers and choose the route a payment must take without manual involvement.
An additional benefit of IBAN is that it reduces delays in international transfers originating from IBAN compliant countries to Somalia.
CBS said it remains committed to fostering inclusive economic growth in Somalia as well as build a stable and sound financial system.
