What happens if an international payment to India is returned?
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Short answer
A returned payment goes back to your client, usually minus return charges, and your invoice stays unpaid. SBI, for example, treats an inward message that is not in order as null and void if no clarification arrives from the remitting bank within 10 working days, and levies return charges such as USD 50 on a dollar payment.1 Because nothing was realised, the nine-month realisation period from the invoice date keeps running.3
A translation studio in Kolkata sees a payment notice from a client, and a week later the client says their bank got the money back. Nothing reached the studio's account. A returned payment is annoying but usually traceable to a fixable cause.
Why do payments to India get returned?
Payments to India are usually returned because the receiving bank or platform could not match or accept them. Common causes:
- Details that do not match: a wrong account number, a name that differs from the account, or a correspondent bank for the wrong currency.
- An incomplete message nobody clarifies. SBI says that if an inward message is not in order and no suitable clarification comes from the remitting bank within 10 working days, the message is treated as null and void and return charges are levied.1
- An amount outside a platform's limits. Wise, for example, returns payments below 5 USD or above ₹25 lakh equivalent to the sender.2
What does a return cost?
A return costs both sides money. SBI publishes return charges for retail inward remittances by currency, including:1
| Currency | SBI return charge |
|---|---|
| US dollar | USD 50 |
| Pound sterling | GBP 40 |
| Euro | EUR 45 |
| Australian dollar | AUD 70 |
| UAE dirham | AED 200 |
Other banks publish their own figures. The client's bank and correspondent banks may also deduct fees on the way out and back.
What happens to your export compliance?
Your export stays unrealised until a payment actually lands. Under regulation 5 of the FEMA (Export and Import of Goods and Services) Regulations, 2026, export value for services must be realised within nine months from the invoice date, or twelve months if invoiced or settled in rupees, and your bank can extend that if you give reasons.3 If the second attempt arrives short because of the lost charges, the bank can allow a reduction in export value, on your declaration alone for export values up to ₹10 lakh.3 If proceeds stay unrealised more than one year after the due date, further exports need full advance payment or an irrevocable letter of credit (regulation 13).3
What should you do next?
Take these steps:
- Get the reason for the return in writing from your bank, and the client's bank's return advice.
- Send corrected bank details, with the purpose of payment and invoice number.
- Agree in writing who bears the charges lost on the first attempt.
- Ask the client for the payment confirmation and tracking reference once they resend.
The full guide, including what to tell the client, is inward remittance returned.
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]State Bank of India: Charges for retail inward remittance transactions, as on 2 June 2026 (checked 28 October 2026)
- [2]Wise Help Centre, Receiving payments for Indian businesses (checked 28 October 2026)
- [3]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 5, 6 and 13)
- [4]State Bank of India: Customer Guide, Export, Import and MTT (main features of SOP under FEMA 23(R)/2026-RB), effective 1 October 2026 (checked 28 October 2026)
Frequently asked questions
Does a returned payment count as being paid for the export?+
No. The export value has not been realised in India, so the invoice is still open and the deadline under regulation 5 of the 2026 Regulations still applies.3
Who pays the return charges?+
Your bank's published return charges apply, and your contract decides who bears them between you and the client. SBI lists GBP 40 and EUR 45, for example, for returned retail inward remittances.1
Can a payment platform return a payment too?+
Yes. Wise, for example, says payments below 5 USD or above ₹25 lakh equivalent are returned to the sender.2
Is refunding an advance the same as a returned payment?+
No. A refund is money you send back after it was credited. SBI's guide says an unused export advance can be refunded only to the buyer who sent it.4
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.
Keep reading
Why was an inward remittance returned, and what should you do next?
Why an Indian bank or payment platform sends a foreign payment back, what return charges banks publish, and how to protect your export realisation deadline.
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How long Indian service exporters have to get paid by foreign clients under FEMA from 1 October 2026, how extensions work and what happens if you miss it.