The International Organisation for Standardization (ISO) adopted the the Business Identifier Code (BIC). SWIFT has been appointed by the ISO as a registration authority with the task to assign BICs (ISO 9362) and to publish BICs in the BIC Directory.
There are two kinds of BIC. They are the eight-character BIC (briefly called "BIC 8") and the eleven-character BIC (called "BIC 11"). A BIC 8 can identify a particular financial or non-financial institution in a country or a location. A BIC 11 is used to identify the branch of the institution.
Here is the structure of a BIC 8:
The institution code identifies the institution, for example BNPA for BNP-Paribas. The code consists of four alphabetic characters.
The ISO country code identifies the country in which the institution is located, for example FR for France. The ISO country code consists of two alphabetic characters.
The location code, provides geographical distinction within a country, such as a city, state, province or time zone, for example PP for Paris. The location code consists of two characters that can be alphabetic or numeric.
Connected and not connected BICs
BICs can identify not only financial institutions but also non-financial ones either connected or not connected to the SWIFT network. A BIC of an institution which is not connected to the SWIFT network still has a location code with the digit 1 at the end (for instance AFSEUS31). BICs like that are called non-SWIFT BICs (or BIC 1).
A BIC for an institution which is connected to the SWIFT network has a location code with a character other than 1 at the end (for instance AGIGUS33). BICs like that are called a connected BIC or a SWIFT BIC. Therefore, a SWIFT BIC is the only one to appear in the header of a SWIFT message.
Test and Training BICs
When there is a BIC with a 0 (zero) in the 8th position in the SWIFT’s FIN messaging system, it means that it is a Test & Training BIC. BICs like that are not used in live FIN messages.
The structure of an 11-character BIC
By adding a branch code, the 8-character BIC can be extended to an 11-character BIC when necessary. For instance: AGIGUS33 MKT
Such branch codes identify the physical branch of a particular institution, for instance MKT (MARKETS INC), or its department or kind of business. These codes consist of 3 alphabetic and numeric characters.
The branch code XXX is added any time when it is necessary to interpret an 8-character BIC code in an 11-character format. The BICs AGIGUS33 and AGIGUS33XXX are equivalent for a message processing application.