The Central Bank is writing to all banks and regulated financial service providers here, as well as business and professional representative bodies, to remind them of their obligations under the Single European Payments Area initiative (SEPA).
This comes as incidents of "IBAN discrimination" continue to be an issue across Europe, including in Ireland.
An IBAN is a unique combination of numbers and letters that identifies a person's account in the Single European Payments Area or SEPA.
The IBAN starts with two letters to denote the SEPA country where the account is based, for example IE for Ireland or DE for Germany.
This country code is followed by two "check digits", and finally a country-specific basic bank account number.
IBANs are used to make and receive domestic and international euro payments across SEPA countries. These payments were harmonised in 2014 when IBANs were made the standard identifier for all SEPA bank accounts.
The Central Bank said that refusing to accept non-Irish IBANs within the SEPA area is prohibited under the SEPA regulations, and is known as IBAN discrimination.
IBAN discrimination creates difficulties for Irish and European consumers, and raises barriers to the proper functioning of the payment system, it added.
The Central Bank's Director of Financial Operations, William Molloy, said that providers and facilitators of SEPA credit transfer and direct debit services must be aware of their obligations under SEPA.
"Consumers should be able to choose their Payment Service Provider (PSP) free from concerns about encountering problems when using their legitimate payment account details," Mr Molloy said.
"Vigilance in ensuring full compliance with these obligations is especially important in the context of the pending exits of Ulster Bank and KBC Bank Ireland from the Irish retail-banking sector," he said.
"As a result of these exits, a large number of customers will be required to relocate their payment accounts to another PSP, and it is important that those customers who choose to use a PSP with a non-Irish IBAN are supported in doing so," he added.
