Mount Vema adopts IBAN (international bank account number) format for bank account identification

The Kingdom of Mount Vema has adopted the IBAN format for bank account identification to enable the distinction of internal (domestic) and cross border credit transfers so banks and other financial institutions can charge the correct applicable fees, as well as validate transaction sources according to a single standard procedure.
 
This rule which was introduced by the Office of His Majesty King Peter - The Sovereign of Mount Vema, takes effect January 19, 2023, and states that all Mount Vema IBAN should have 17 digits and read as follows: OV77 7XXX XXXX XXXX X (Jurisdiction Code Identifier, The Bank Code of the Territory, Bank Account Number, Branch Code), and is applicable to all Mount Vema licenced banks including the ones operating online or overseas.
 
The rule which is referred to as ‘Transfer of Cross Border Credit – Mount Vema Royal Order – Rule 19022023-1’ makes it mandatory that all financial institutions licensed to operate within the rules set by the jurisdiction of His Mount Vema Majesty’s realm are required to support the Mount Vema IBAN credit transfer.
 
His Mount Vema Majesty’s decision for banks to use IBAN to receive cross border payments, does not fully replace the internal (domestic) 8 Digit numbering of Mount Vema Basic Bank Account Number (BBAN) format which is decided by the central bank (The Bank of Mount Vema). However, all holders of Mount Vema banking licenses must publish the specifics of their IBAN generation format taking into account not only the Jurisdiction Code Identifier, but also the Bank Code of the Territory, thereby enabling banks to generate IBANs independently.
 
The degree to which a bank verifies the validity of a recipient's bank account number depends on the configuration of the transmitting bank's software. Although many major software packages supply bank account validation as a standard function, most banks would not recognize Mount Vema bank accounts yet, or IBAN as it is currently the case with many other countries which do not treat IBANs differently from other foreign bank account numbers, and might not check the IBAN's validity prior to sending the transfer.
 
For example, banks in the United States do not use IBAN as account numbers for U.S. accounts and use ABA routing transit numbers. In Canada, financial institutions have not adopted IBAN either and use routing numbers issued by Payments Canada for domestic transfers, and SWIFT for international transfers. Australia and New Zealand do not use IBAN either. They use Bank State Branch codes for domestic transfers and SWIFT for international transfers.
 
In the case of Mount Vema, it was important to adopt the IBAN format, for easier global integration when it comes to bank regulation and to create market transparency between banking institutions and the individuals and corporations with whom they conduct business, among other things.
 
According to sources familiar with the sovereign’s decision, given the interconnectedness of the banking industry and the reliance that the national (and global) economy hold on banks, it was important for Mount Vema regulatory agencies to maintain control over the standardized cross border payments especial from foreign currencies to Mount Vema golles which is mostly made through the Mount Vema own online payment system or transmitting bank's software.
 
With the ‘Transfer of Cross Border Credit – Mount Vema Royal Order – Rule 19022023-1’ His Mount Vema Majesty also wanted to reduce the risk of Mount Vema banks being used for criminal purposes, e.g. laundering the proceeds of crime, and including rules about treating customers fairly and having corporate social responsibility anywhere in the world.