14 November 2008

Concerning payment intermediation through the Central Bank of Iceland

As is well known, transfers of funds between Iceland and other countries often take longer than they did previous to the banks' collapse in October. The situation has improved significantly in recent weeks; however, it is important that all necessary information accompany payment instructions so as to prevent delays in payment intermediation.

Payments sent to Iceland through the Central Bank of Iceland are deposited to the Central Bank's bank accounts abroad. In some instances, no further information has accompanied such deposits; that is, the amount appears on a statement from the foreign bank, without any identification of the ultimate recipient. When this happens, it is necessary to request the missing information. The Central Bank transfers funds to commercial banks in Iceland on the day it receives them, provided that the payments are accompanied by the information necessary to complete the transfer.

In order to enhance the likelihood that this information will be received in a timely manner, payers should request that their banks send any such payments as an “international customer transfer.”