Bank Code Bank Code Verification 2 — Questions and Answers
Question 1: Which validation method is used to verify an IBAN (International Bank Account Number)?
- Luhn algorithm applied to all numeric characters
- MOD 97 remainder check requiring a result of 1 (Correct answer)
- SHA-256 hash comparison against a central registry
- XOR checksum of all alphanumeric characters
Correct answer: MOD 97 remainder check requiring a result of 1
IBAN validation uses the MOD 97 algorithm: after rearranging and converting letters to numbers, dividing the result by 97 must yield a remainder of 1.
Question 2: What is the correct first step in the MOD 97 IBAN validation process?
- Convert all letters to their ASCII values and sum them
- Divide the full IBAN by 97 directly
- Move the first four characters to the end of the number string (Correct answer)
- Remove all non-numeric characters before calculating
Correct answer: Move the first four characters to the end of the number string
The first step is to relocate the leading 4 characters (country code + check digits) to the end of the string before performing numerical conversion and division.
Question 3: How many characters are in a valid SWIFT/BIC code?
- 6 or 10
- 8 or 11 (Correct answer)
- 9 or 12
- 7 or 14
Correct answer: 8 or 11
A SWIFT/BIC code is either 8 characters (without branch code) or 11 characters (with branch code).
Question 4: What do characters 1–4 of a SWIFT/BIC code identify?
- The country where the bank is headquartered
- The city where the branch is located
- The bank or financial institution code (Correct answer)
- The Federal Reserve district equivalent
Correct answer: The bank or financial institution code
The first four alphabetical characters of a SWIFT code form the institution code, uniquely identifying the bank or financial organization.
Question 5: Characters 5 and 6 of a SWIFT/BIC code represent what?
- The bank's internal department code
- The ISO 3166-1 alpha-2 country code (Correct answer)
- The account holder's region
- The bank's founding decade
Correct answer: The ISO 3166-1 alpha-2 country code
Positions 5–6 in a SWIFT code always hold the two-letter ISO country code (e.g., US for United States, DE for Germany).
Question 6: What does 'XXX' at the end of an 11-character SWIFT code signify?
- The code is flagged as potentially fraudulent
- The bank is not a SWIFT member
- The code refers to the bank's primary or head office (Correct answer)
- The branch information is classified
Correct answer: The code refers to the bank's primary or head office
When the optional 3-character branch code is 'XXX', it indicates the message or transaction is directed to the bank's primary office rather than a specific branch.
Question 7: Which organization issues and maintains the global SWIFT/BIC code registry?
- The World Bank
- The International Monetary Fund (IMF)
- The Society for Worldwide Interbank Financial Telecommunication (SWIFT) (Correct answer)
- The Bank for International Settlements (BIS)
Correct answer: The Society for Worldwide Interbank Financial Telecommunication (SWIFT)
SWIFT (Society for Worldwide Interbank Financial Telecommunication) owns and administers the BIC (Bank Identifier Code) registry used globally for interbank messaging.
Bank Code Bank Code Verification 2
Which validation method is used to verify an IBAN (International Bank Account Number)?