You invoice USD 5,000, your client sends USD 5,000, and USD 4,965 lands in your account. The missing USD 35 is almost always bank charges taken along the way by the sending, intermediary or receiving banks. Those deductions do not change what you invoiced, but they do leave a gap between the invoice and the money realised, and your AD bank will need an explanation before it can close the export entry cleanly.
Key takeaways
- The charge instruction on a wire, OUR, SHA or BEN, decides who bears the fees.
- Intermediary bank deductions are the most common reason export payments arrive short.
- On the EDF, net realisable value (NRV) in Part 2B is where expected deductions can be reflected; confirm your bank's approach.
- When a shortfall appears, explain it to the bank with the payment advice or SWIFT message.
- Agree the charge code in your contract so the client knows to pay fees on their side.
The three charge codes on a SWIFT payment
Cross-border wires carry a field that tells every bank in the chain who pays the fees. You will see one of three codes on the payment message, often an MT103.
| Code | Who pays sending bank fees | Who pays intermediary and receiving fees | What you usually receive |
|---|---|---|---|
| OUR | Client (remitter) | Client, in principle | Full invoice amount, though intermediaries sometimes still deduct |
| SHA | Client | You (beneficiary) | Invoice amount minus intermediary and receiving charges |
| BEN | You | You | Invoice amount minus all charges, including the sender's |
SHA, short for "shared", is the default at many banks worldwide. That is why short receipts are so common: your client pays their own bank's fee, and every bank after that takes its cut from the amount travelling to you.
Even with OUR, a correspondent or intermediary bank can occasionally deduct a fee. It is less frequent but it happens, so build a small tolerance into your expectations.
Why the shortfall matters for FEMA
Under the 2026 Regulations, the full export value of a services invoice must be realised within 9 months from the invoice date (12 months for rupee invoices). Your AD bank tracks each invoice in EDPMS and closes it when realisation is complete.
If an invoice shows USD 5,000 and only USD 4,965 is credited, the system sees USD 35 outstanding. The amount is trivial, but an open entry is an open entry. It can delay closure, hold up the eBRC and, if left long enough, look like an unrealised export. The fix is not to chase the client for USD 35. It is to document why the money did not arrive.
Net realisable value on the EDF
Part 2B of the EDF has a column for net realisable value alongside the invoice amount. NRV is meant to capture what you actually expect to realise after known deductions. For most service exporters, NRV equals the invoice amount, because you do not know in advance what charges intermediaries will take.
Where you do know a deduction is coming, for example because your contract says the client pays BEN or a platform fee is fixed, ask your bank whether to reflect it in NRV. Approaches vary, and your bank's published EDF policy or relationship manager is the right authority. Our article on calculating NRV correctly goes deeper.
A worked example
Orbit Ledger Services LLP, a Coimbatore bookkeeping firm, invoiced a client in Ohio for USD 7,200 on 12 October 2026 and declared it on the October EDF with NRV of USD 7,200. The client's bank sent the payment SHA.
On 20 November, Orbit's account was credited USD 7,162. The FIRA showed USD 7,162 received; the SWIFT message showed USD 7,200 sent with two deductions: USD 20 by a New York correspondent and USD 18 by a second intermediary.
Orbit's accountant did three things:
- Recorded the receipt in the EDF register: amount received USD 7,162, charges USD 38, with a note on who deducted what.
- Wrote to the AD bank with the invoice, the FIRA and the SWIFT copy, asking it to match the receipt to invoice OL/26/118 and treat the USD 38 as bank charges deducted abroad.
- Changed future invoices to state "All bank charges outside India to be borne by the client (OUR)".
The bank matched the payment and closed the entry. At an assumed rate of ₹84 per dollar, the USD 38 was roughly ₹3,192: not worth a dispute, but well worth a letter.
Documents that prove a deduction
Keep these together for every short receipt:
- The invoice, showing the full amount and currency.
- FIRA or FIRC from your bank, showing the amount received and the purpose code.
- SWIFT message or payment advice, showing the amount sent and any charges deducted en route. If you do not have it, ask your bank or ask the client to send their bank's confirmation.
- Your covering letter to the AD bank explaining the gap and identifying the invoice.
If the receiving bank in India also took a fee, that usually shows on your credit advice. Ask your bank for a breakdown if the statement only shows a net figure. Do not confuse these fees with forex markup, which is the spread built into the conversion rate and does not reduce the foreign-currency amount realised.
Preventing short receipts
You cannot remove charges, but you can shift who bears them and make them predictable.
- Put the charge code in your contract and on your export invoice: "Remitter to pay all charges (OUR)".
- Ask clients to quote your invoice number in the payment reference so matching is easy even when amounts differ.
- For small recurring invoices, consider whether a local collection account through a regulated provider reduces intermediary hops; check how its payouts are documented for EDPMS.
- Where a client insists on SHA, agree in writing that small deductions will not be re-billed, and keep that email for the bank.
This is general information, not legal or tax advice. GST treatment of bank charges and of short receipts is a separate question for your CA.
Frequently asked questions
Does a bank charge deduction mean I have not realised the full export value?
Strictly, the credited amount is lower than the invoice, so the bank sees a gap. When you show the gap is due to bank charges deducted abroad, banks can generally treat the invoice as realised. Send the invoice, FIRA and SWIFT copy with a short explanation.
What is the difference between SHA and OUR?
With SHA, the client pays their own bank's fee and you bear charges from intermediary and receiving banks. With OUR, the client is meant to pay all charges so you receive the full amount, although intermediaries occasionally still deduct.
Should I show bank charges as NRV on the EDF?
Only if you know the deduction in advance and your bank's policy asks for it. For most service exporters the charges are unknown at filing time, so NRV equals the invoice value and deductions are explained at matching stage.
Can I invoice the client for the charges later?
You can, if your contract allows it. In practice many exporters absorb small deductions and fix the charge code for future invoices instead. If you re-bill, issue a fresh invoice and declare it in the month it is raised.
Bottom line
Bank charges abroad are a paperwork problem, not a compliance crisis, as long as you explain them promptly with the invoice, FIRA and payment message. Fix the charge code in your contracts and the problem shrinks. Add an OUR clause to your next bill with our free export invoice generator.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.