Does my bank owe me interest if it delays crediting a foreign payment?
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Short answer
Yes, in defined cases. Rule 4.5 of the FEDAI Rules, as amended on 7 September 2026, says that if a bank delays transferring an inward remittance after receiving your compliant disposal instruction and documents, it shall pay you interest at 2% over its savings bank interest rate, plus compensation for adverse exchange rate movement as per its compensation policy.1 The same rule requires the bank to inform you immediately when the inward payment message arrives.1
A marketing consultant in Gurugram sees on a tracker that a client's dollars reached her bank days ago, but nothing is in her account and nobody has called. Indian banks are not free to sit on inward remittances: the rules of the Foreign Exchange Dealers' Association of India (FEDAI) set timelines and a compensation rule.1
What must the bank do when a foreign payment arrives?
The bank must tell you as soon as the payment message arrives. Under FEDAI Rule 4.5, Authorised Dealers inform the beneficiary immediately on receipt of the inward payment message; messages received after operating hours are intimated at the start of the next business day.1 Banks reconcile credits in their nostro accounts on a near real-time basis or at intervals normally not exceeding one hour.1
How quickly should the money be credited?
Rule 4.5 says that, subject to FEMA and the bank's internal requirements, the bank shall endeavour to credit inward remittances received during foreign exchange market hours the same business day, and those received after market hours the next business day.1 It must pay or send intimation to you within two working business days from receipt of the credit advice or nostro statement.1
When does the bank owe you interest?
The bank owes you interest when it delays the transfer after you have done your part. Once it receives a disposal instruction complying with guidelines and the required documents, it must transfer the funds within the rule's timeline; in case of delay, the bank shall pay interest at 2% over its savings bank interest rate.1 It shall also pay compensation for adverse movement of the exchange rate, if any, as per its own compensation policy, which specifies the reference rate and date.1
Why might the bank still hold the money?
The bank may hold the money while it checks the payment, which the export rules allow. Under regulation 4 of the FEMA (Export and Import of Goods and Services) Regulations, 2026, a bank credits an export receipt only after satisfying itself the transaction is genuine.2 So reply quickly to any request for an invoice or purpose; see why your bank asks for an invoice.
How do you claim it?
Write to your branch with the date the bank received the funds, the date you sent your instruction and documents, and the date of credit, and ask for interest and any exchange compensation under FEDAI Rule 4.5 and the bank's compensation policy.1 If the payment has not reached your bank at all, start with what to do when an international payment is stuck.
How did we verify this?
We checked this page against the sources below on 28 October 2026. Read our methodology or report an error.
- [1]FEDAI: Rules, updated up to 20 August 2026, Rule 4.5 (compensation for delayed payment), as amended by AR Circular No. 03/2026 dated 7 September 2026
- [2]RBI: Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, Notification No. FEMA 23(R)/2026-RB, amended up to 22 September 2026 (regulations 4 and 19)
Frequently asked questions
What is FEDAI?+
The Foreign Exchange Dealers' Association of India, whose rules govern how member banks handle foreign exchange transactions, including inward remittances.1
Does the interest apply if I have not sent the documents my bank asked for?+
Rule 4.5 ties the transfer obligation to receipt of a disposal instruction complying with guidelines and the required documents from the beneficiary, so a delay on your side is not the bank's delay.1
What if I do not respond to my bank's intimation at all?+
Rule 4.5 says that if the beneficiary does not respond within five working business days and the bank does not return the remittance, the bank starts action to crystallise it, after notifying the remitting bank and the beneficiary.1
Can my bank charge me a penalty for my own delay?+
No penalty for regulatory delay. Regulation 19 of the 2026 Regulations says a bank shall not levy charges or penalties on its customer for regulatory delays or violations by the customer.2
This page is general information for Indian service exporters, not tax or legal advice. Rules change and outcomes depend on your facts, so confirm with a chartered accountant before acting.
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