The Central Bank of Somalia (CBS) has taken another progressive step toward transforming the nation’s financial sector by enforcing the use of International Bank Account Numbers (IBAN) by commercial lenders.
This new development, which took effect on March 27, is part of a series of financial sector reforms aimed at integrating the country into the global payments system.
According to CBS Governor Abdirahman Abdullahi, the adoption of IBAN is a significant achievement for the entire CBS team and reflects the regulator’s determination to develop the country’s financial sector. He expressed optimism that the use of IBAN would help to restore the confidence of international correspondent banks, regulators, and investors in Somalia’s reintegration into the international financial market.
“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. IBAN delivers significant advancement for our banks, and we hope this will help restore the assurances of international correspondent banks, regulators, and investors with regard to Somalia’s reintegration into the international financial market.”
CBS Governor Abdirahman Abdullahi
The regulator stated that the use of IBAN has been successfully adopted by all banks in the country for transactions going through Somalia’s National Payment System (NPS). This move is expected to enhance payment processing performance, reduce operational risks for bank transactions, and enable NPS to electronically validate bank account numbers and choose the payment route without manual involvement. Additionally, the use of IBAN will reduce delays in international transfers originating from IBAN-compliant countries to Somalia.
The CBS remains committed to fostering inclusive economic growth in Somalia while building a stable and sound financial system. The adoption of IBAN by commercial lenders is one of the latest measures taken by the regulator to achieve this goal.
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