What your bank actually deducted before your export payment landed

The invoice read one figure, in dollars. Convert it in your head at today's rate and the number should have been rounder than the rupees that actually landed.

That gap is not automatically a problem. Somewhere between your buyer's bank and your account, a currency was converted at a rate your own bank chose, and one or more banks along the way may have taken a fee. Nothing you were handed separates these two things out, and nobody is obliged to explain the number before you ask.

Nobody here is telling you to move your banking. What follows is how to read the documents you already have, closely enough to know what happened to this one payment.

Where the rate on your credit advice actually comes from#

When your export proceeds arrive, your bank converts them into rupees at what banking rules call its TT buying rate: TT for telegraphic transfer, the standard route a wire travels by. The rules governing this are set by the Foreign Exchange Dealers' Association of India (FEDAI), the industry body whose rulebook every authorised dealer bank in India follows. Those rules say the conversion happens at the bank's own TT buying rate, or a rate you contracted for in advance. There is no single, government-fixed number that applies to every bank alike.

The same rulebook lets a bank set its own charges too, on the condition, stated loosely, that they stay "not out of line with the average cost of providing services." No percentage or rupee figure is attached to that condition anywhere. So the rate on your credit advice is a real rate your bank genuinely applied, and also a number the bank had wide, unwritten room to choose. It may still be a fair one. Checking it against something independent is the only way to know.

What to check it against#

The Reserve Bank of India publishes a daily reference rate for the US dollar and other major currencies, drawn from the interbank market. It is not a rate any exporter can transact at, but it is the closest thing to a neutral answer to what a dollar was actually worth on a given day, and it is public.

Look up the rate for the value date on your credit advice: the day the conversion actually happened, not the day you shipped or invoiced. Put it beside the rate your bank applied. FEDAI's rules also require every bank to publish its own day's card rate, and to state in advance the transaction size up to which it commits to using that rate. Ask your relationship manager for that figure too. Three numbers side by side, the RBI reference rate, your bank's own published card rate, and the rate actually used on your transaction, say more together than any one of them alone.

Reading your FIRC or credit advice#

The document your bank issues on realisation, usually a credit advice, often bundled with your FIRC, typically shows the amount in foreign currency, the rate applied, the rupee amount credited, and a reference number tying it to the transfer. It does not usually show the day's reference rate, and it does not say whether anything was taken out before your bank applied its rate to what was left. For that you need the message that actually carried the money, not the summary your bank produced from it.

The same remittance is also what your bank later matches against your shipping bill to close the entry in EDPMS. Until that matching happens, the entry stays open, regardless of what rate was used to convert it. The two questions are separate, so do not let one wait on the other.

The SWIFT message underneath it#

Every international wire reaching an Indian bank travels as a SWIFT message in a standard international format, and you are entitled to ask your bank for a copy of the one that carried your payment. Most banks call it the inward remittance advice, or simply the SWIFT copy. Three fields on it answer what your credit advice does not.

Field 32A carries the amount and currency your bank's own account actually received, on the date it was settled. Field 33B, present only when it differs from 32A, carries the amount your buyer's bank was originally instructed to send. If the two differ, something was taken out between your buyer and your bank, and the message says so directly.

Field 71A carries a three-letter instruction your buyer's bank chose when the payment was sent, and it decides who was meant to pay for the transfer, a term you can also agree with your buyer up front rather than discover after the money lands. "OUR" means the sender agreed to cover every fee along the route, so the full instructed amount should reach you. "SHA" splits the cost, each bank taking its own charge from its own side. "BEN" puts every fee on you, deducted before the money reaches your account. Where charges were actually taken out under SHA or BEN, a further field, 71F, itemises them.

Set what 71A says against what 32A and 33B actually show. A message marked "OUR" with a gap between the two amounts is not an exchange-rate question at all. It is a fee that should not have been deducted, worth raising with your bank on exactly that basis.

Three places a rupee can go missing before you see it#

Correspondent or intermediary banks, en route. A payment between two countries often passes through one or more banks that neither you nor your buyer chose. Each can take a fee, and under "SHA" or "BEN" those fees come out of what reaches you. Field 71F on the SWIFT copy is where they should be itemised. Ask for it specifically if it is missing.

Your own bank's lifting or handling fee. Separately from the wire itself, your bank may charge its own fee for receiving and crediting a foreign remittance. FEDAI's rules let it set that fee itself, the same way it sets its charges generally. This usually appears as its own line on your credit advice or a separate debit in your statement, not inside the SWIFT message. Check both documents rather than one.

The gap between the rate applied and the reference rate. Whatever is left once the two above are accounted for is the conversion itself: the difference between your bank's TT buying rate that day and the RBI's published reference rate. Some difference is ordinary; a bank carries a real cost to hold and trade currency. Whether the size of it is reasonable is a conversation to have with your bank, and one you can only have well with the numbers actually in front of you.

What this tells you, and what it does not#

This will not settle whether your bank treated you fairly on this payment. What it gives you is a way to check, from a document your bank has already sent you and one it is obliged to hand over if you ask for it. Do it once, on a payment large enough to be worth the twenty minutes, and you will know precisely which of the three places to point to the next time a number lands smaller than it should.