Have you ever received an overseas payment only to find your USD to INR payout short? You’re not alone. Many freelancers, exporters, and businesses in India notice their inward remittance short credit, where the final credited amount is lower than expected.
The good news: it’s rarely fraud or a mistake. Instead, it’s the result of intermediary deductions, correspondent bank fees, SWIFT charges (SHA/OUR/BEN), and currency conversion markups. Let’s walk through why your payment arrives short and what you can do about it.
The Journey of an International Payment
When someone wires money from the U.S. to India, it doesn’t go directly from their bank to yours. Instead, it passes through multiple banks, each possibly deducting fees. Here’s the typical flow:
- Sender’s Bank – Charges a fee to initiate the transfer.
- Intermediary / Correspondent Banks – If the sender’s bank has no direct tie with your Indian bank, the payment passes through one or more correspondent banks, each charging a cut.
- Receiving Bank in India – Credits the funds, converts USD to INR, and may apply hidden margins through the exchange rate.
At each step, deductions occur, causing your inward remittance short credit.
1. Intermediary Bank Fees – The Hidden Middlemen
One of the biggest culprits behind a USD to INR payout short is the intermediary (correspondent) bank fee.
- If the U.S. bank and your Indian bank don’t have a direct tie-up, the money goes through a correspondent bank.
- Each correspondent bank may charge $15–$50 per transaction (₹1,200–₹4,000).
- These deductions are not shown upfront and are simply removed before the funds reach you.
Example: If two intermediaries deduct $20 and $15, your payout shrinks by $35.
This is why payments often feel like money “disappeared” en route—it’s eaten up by correspondent banks.
2. Receiving Bank Charges – When Your Bank Takes a Cut
Once the funds reach India, your receiving bank may also reduce your payout:
- Some banks abroad charge inward remittance fees ($15–$25).
- Many Indian banks (e.g., HDFC, ICICI) advertise zero fees for inward remittance. But they often recover costs through currency conversion markups.
- Sometimes, banks charge for issuing compliance documents like Foreign Inward Remittance Certificates (FIRC).
In short: even if your bank says “no receiving fees,” the cost is usually hidden elsewhere.
3. Currency Conversion Markup – The Invisible Deduction
The biggest reason your USD to INR payout is short is the currency exchange markup.
- Example: Market rate is $1 = ₹85.7, but your bank credits you at $1 = ₹83.2.
- On a $1,000 transfer, you lose ₹2,500+ simply due to a weaker exchange rate.
- This 2–3% markup is how banks profit from “no fee” remittances.
In many cases, the exchange rate loss is larger than all other fees combined.
4. SWIFT Charge Types (SHA/OUR/BEN) – Who Pays the Fees?
Every SWIFT transfer includes a setting that decides who pays the fees:
- SHA (Shared charges) – Most common. Sender pays their bank’s fee; you pay intermediary and receiving bank fees. This usually causes inward remittance short credit.
- OUR (Sender pays all) – The sender covers all fees, and you receive the full amount.
- BEN (Beneficiary pays all) – You bear all charges, including the sender’s bank fee. This is least favorable.
Unless agreed otherwise, assume SHA is used—and expect deductions.
5. Example: Why $10,000 Became Less in Your Account
Imagine you’re expecting $10,000 from a U.S. client:
- Sender’s bank charges them $40 to send (not deducted from your amount under SHA).
- An intermediary bank deducts $25 → you now get $9,975.
- Your Indian bank applies a 2% weaker USD-INR rate, reducing payout by another ₹16,000.
End result: You receive about ₹811,000 instead of ₹827,000—all due to intermediary deductions, correspondent bank fees, and exchange rate markups.
How to Minimize Short Credits in USD-INR Payments
While you can’t avoid all fees, you can reduce losses:
- Negotiate fees with clients – Ask them to use OUR (sender pays all) for large transfers.
- Factor fees into invoices – Add $30–$50 to cover expected intermediary deductions.
- Use fintech alternatives – Platforms like Wise or Payoneer bypass SWIFT, cut out intermediaries, and give mid-market rates.
- Ask your bank for transparency – Request the SWIFT MT103 report to see where deductions happened.
- Consider a USD account (EEFC) – Hold funds in USD, then convert when rates are favorable.
Final Thoughts
If your USD to INR payout is short, it’s usually because of:
- Intermediary deductions by correspondent banks
- Receiving bank charges
- Currency conversion markups
- SWIFT charges (SHA/OUR/BEN) settings
These aren’t mistakes—they’re part of the international payment system. The key is being aware, planning ahead, and using smarter transfer methods to keep more of your money.Every rupee saved from inward remittance short credit strengthens your business. With knowledge and the right approach, you can minimize deductions, maximize payouts, and grow with confidence.
