What Is Intermediary Bank Charges?

When money moves across borders, each bank in the route may take a small fee for passing it on. These are the intermediary bank charges. They come out of the payment, so the sender's bank may report the full amount sent while a smaller amount reaches you. Swift describes these as deducts and says poor visibility of them creates uncertainty. The size depends on the route, which the sender's bank usually picks. For this reason, ask your client to send the transfer confirmation if your credit is short. Then compare it with your bank's advice.

For example, a freelance writer in Jaipur invoices a client for USD 500. The client sends USD 500. A bank in the middle takes USD 15 and the writer's credit is based on USD 485.

• Bank compliance: Regulation 19 of the FEMA Export and Import Regulations, 2026 asks each AD bank's internal policy to list the charges for each process and to disclose its main features on its website. Check your bank's published charges.
• FEMA: The invoice value must be realised under Regulation 5. Ask your AD bank how short receipts caused by charges are to be treated in its records.
• GST: Rule 89(2)(c) of the CGST Rules refers to bank realisation certificates for export refunds. Where deductions were made, keep the advice that shows the amount actually realised.
• Income tax: Record the gross invoice value, the charges and the net credit. Ask your tax adviser how the charges should be shown.

Intermediary charges arise while a payment travels through banks that have no direct link with each other. The deduction happens before the money reaches India.

1. Your client chooses a charges option on their bank's form.
2. Their bank selects a route, which may include correspondent banks.
3. Each intermediary may deduct a fee from the amount.
4. The remaining amount reaches your Indian bank.
5. Your bank converts and credits it, and may add its own handling fee.

Compare the amount the client sent with the amount your bank received, using clearly hypothetical numbers to plan.

1. Note the invoice amount, for example USD 800.
2. Get the client's transfer confirmation showing the amount sent and the charges option.
3. Get your bank's advice showing the foreign amount received.
4. Subtract: USD 800 less USD 780 received means USD 20 in deductions.
5. Ask your bank to confirm whether any part of the USD 20 was its own fee.

Intermediary charges and FX markup both reduce what you receive, but they arise differently. Intermediary charges come from banks along the route. FX markup is the margin in the exchange rate used for conversion.

• Only the client's fee: The client's bank fee and the intermediary fee are separate costs.
• Always avoidable: A charges option set by the client may help, but intermediary deductions can still occur depending on the route.
• Same as FX markup: They are different costs. Check both on each payment.

• Correspondent bank: A bank that passes on payments for another bank.
• FX markup: The margin added to the exchange rate.
• SWIFT transfer charges: Fees taken along an international wire.
• Wire transfer: A bank-to-bank transfer of funds.
• SWIFT code: The identifier used in international payment messages.

Every rule and definition on this page is linked to its official source, checked on the dates below.

1. RBI, FEMA (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB), Regulation 5 (realisation) and Regulation 19 (AD bank charges policy) (checked 9 Oct 2026)
2. Swift GPI product page, Deducts and transparency (checked 9 Oct 2026)
3. CGST Rules, Rule 89 (Application for refund), Rule 89(2)(c) (checked 9 Oct 2026)