What are intermediary bank charges?
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Short answer
Intermediary bank charges are fees taken by correspondent banks that handle an international wire between the sender's bank and the recipient's bank.1 The European Central Bank defines correspondent banking as "an arrangement whereby one bank (the settlement or service-providing bank) makes or receives payments" for another bank.1 Deducted charges leave an exporter short of the full export value.2
| Full form | Governed by | Who needs it | Where it is used | Related terms |
|---|---|---|---|---|
| Intermediary (correspondent) bank charges | Set by each bank in the chain; shortfalls handled under regulation 6 of the FEMA (Export and Import of Goods and Services) Regulations, 202612 | Exporters receiving international wires through correspondent banks1 | SWIFT wires to Indian bank accounts; e-BRC invoice details23 | Correspondent bank, OUR SHA BEN charges, SWIFT code, short realisation |
A client in Canada pays an invoice in full, and your Indian bank credits the rupee equivalent of a smaller amount. Often, part of the gap is intermediary bank charges taken on the way by banks that handled the payment.1
What do intermediary bank charges mean in simple words?
Intermediary bank charges are deductions made by banks that sit between your client's bank and your bank on an international wire. When the two banks have no direct relationship, the payment passes through one or more correspondent banks. The ECB describes correspondent banking as an arrangement in which one bank makes or receives payments, and may perform other banking services, on behalf of another bank.1
Each bank in the chain can take a fee, often from the amount being sent.
Why do intermediary bank charges matter for Indian exporters and freelancers?
Intermediary bank charges matter for Indian exporters and freelancers because they create a gap between the full export value declared and what was realised.2
- Bank compliance: Under the FEMA (Export and Import of Goods and Services) Regulations, 2026 (the 2026 Regulations), a service exporter's Export Declaration Form states the full export value, and regulation 5 requires that full value to be realised and repatriated within the specified period.2
- Shortfalls: Regulation 6 allows the authorised dealer bank, on request citing the reasons, to permit realisation of less than the full value; for invoices up to ₹10 lakh, a declaration from the exporter can be enough.2
- e-BRC: The e-BRC is generated on the amount received in the bank's Inward Remittance Message, and other deduction charges can be entered in the invoice details tab.3
The 2026 Regulations do not mention bank charges specifically, so your bank's policy decides how it closes such entries.2
How do intermediary bank charges work?
Intermediary bank charges work through the wire's route and its charge instruction.1
- Route: For example, a copywriter billing a small dollar invoice, a data analytics firm billing a large one and an architecture practice billing in euros can all see deductions, and the deduction does not scale neatly with the amount.
- Charge instruction: Wires usually carry one of three options, OUR, SHA or BEN, which decide who pays.
How do you check and reduce intermediary bank charges?
You check intermediary bank charges by asking your bank for the inward remittance details, and you reduce them by changing who pays or how the money travels.
- OUR instruction: Ask the client to send the wire with the OUR instruction, and say so on the invoice.
- Pricing: Build expected charges into your price for clients who cannot pay OUR.
- Correspondent bank: Ask your bank which correspondent bank to name for each currency, to shorten the chain.
- Local collection: Compare local collection routes, which avoid the correspondent chain for the client's leg.
The costs of each route are in SWIFT transfer charges in India.
What is the difference between OUR, SHA and BEN charges?
OUR, SHA and BEN are the three charge instructions on a wire, and each decides who bears intermediary bank charges.
| Option | Who pays charges | Best for |
|---|---|---|
| OUR | The sender pays all charges | Exporters who need the full invoice amount to arrive |
| SHA | Charges are shared; each side pays its own bank, with intermediary charges often taken from the amount | Clients and exporters who agree to split costs |
| BEN | The beneficiary pays all charges | Cases where the exporter has agreed to absorb charges |
See OUR, SHA and BEN charges for detail.
What do people get wrong about intermediary bank charges?
People most often get wrong how the shortfall is handled and how much it will be.2
- Reporting: A short-paid invoice still needs closing with your bank under regulation 6.2
- Size: The deduction does not scale neatly with the invoice amount.
- Bank charges: Regulation 19 requires banks to keep their charges reasonable and proportional.2
Which terms are related to intermediary bank charges?
The terms related to intermediary bank charges cover the wire route and the shortfall it causes.
- Correspondent bank: The bank in the chain; see what is a correspondent bank.
- SWIFT code: The bank identifier on the wire; see what is a SWIFT code.
- SWIFT gpi and UETR: Tracking for a wire in the chain; see what is SWIFT gpi and UETR.
- FX markup: A separate cost inside the rate; see what is an FX markup.
For closing a short-paid invoice with your bank, see short realisation of export proceeds.
How did we verify this?
We checked this page against the sources below on 30 October 2026. Read our methodology or report an error.
- [1]European Central Bank: Glossary, correspondent banking (checked 28 October 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 3, 5, 6 and 19)
- [3]DGFT: FAQs (Self-Generation of eBRC), Version 1.0, March 2024, questions 20 and 22
Frequently asked questions
Why was less than the invoice amount received from a foreign client?+
Common reasons are fees deducted by intermediary or correspondent banks along the wire route, charges by your own bank, or a conversion rate below what you expected. Ask your bank for the inward remittance details, which show the amount that arrived, so you can see which deduction caused the gap.
Does a shortfall caused by intermediary bank charges have to be reported?+
The FEMA (Export and Import of Goods and Services) Regulations, 2026 do not mention bank charges specifically. Regulation 6 lets your authorised dealer bank allow a reduction in export value on reasons you give, and for invoices up to ₹10 lakh, a declaration from you can be enough.2 Ask your bank how it closes such entries.
How are intermediary bank charges shown on an e-BRC?+
DGFT's FAQs on self-generation of eBRC say the e-BRC is generated on the amount received in the bank's Inward Remittance Message, and other deduction charges can be entered in the Shipping Bill/Invoice details tab.3 Enter the intermediary bank charges there so the e-BRC ties back to the full invoice.
Can intermediary bank charges be avoided?+
Intermediary bank charges can be reduced by asking the client to choose the OUR charge option on the wire, by pricing them into the invoice, or by using a local collection route that avoids the correspondent chain. Each option has its own cost, so compare the rupees that reach your account.
Are Indian banks' charges on export receipts regulated?+
Regulation 19 of the FEMA (Export and Import of Goods and Services) Regulations, 2026 requires banks to keep their charges reasonable and proportional.2 That regulation covers your own authorised dealer bank in India. Charges taken by foreign correspondent banks along the wire route are set by those banks.
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
What charges apply when you receive a SWIFT transfer in India?
Why a SWIFT wire to India arrives short: sender, correspondent and Indian bank charges, OUR vs SHA, GST on conversion, and six Indian banks' published fees.
RBI and FEMAWhat should you do when export proceeds are short-realised?
When less money reaches India than your export invoice says, FEMA calls it under-realisation. How service exporters regularise it with their AD bank from 1 October 2026.
GlossaryWhat are OUR, SHA and BEN charges?
OUR, SHA and BEN are the options a sender picks for who pays SWIFT wire charges. What each means for the amount an Indian exporter actually receives.
GlossaryWhat is a correspondent bank?
A correspondent bank provides banking services to another bank, such as making or receiving payments for it abroad. Why it can reduce an Indian exporter's receipt.