Bank Charges for Foreign Remittance: Complete Fee Comparison (2025)

Serving a global customer base? Whether you're running a full-fledged overseas business or freelancing for an international client, foreign inward remittance can make up a big chunk of your income. It is simply the money that you receive from overseas in your Indian bank account.

But, there are two problems:

• Managing international payments isn't as easy as domestic transfers.
• You need to account for charges like forex rates, currency conversion markups, bank service fees, etc., which means you wouldn't receive the full amount that was credited to your bank account.

This is why it is important to understand the charges levied by different banks and fintech platforms.

Every time you receive an international payment, the bank deducts some charges before depositing the money into your account. These charges cover the cost of processing and compliance involved in international transfers. This typically includes three key steps:

• The bank receives the money through secure international networks like SWIFT.
• If the funds are in USD, EUR, or any other foreign currency, the bank converts them into INR.
• They also manage all paperwork and reporting under FEMA guidelines.

You need to pay bank charges for foreign inward remittance for these services. This is typically in the form of currency conversion charges or handling costs for receiving money via SWIFT/correspondent bank fees. These charges also depend on remittance categories (express, wire, DD).

Remember that even if your customer pays their share of fees, your bank will still apply its own charges. This can reduce the credited amount. This is why you must understand how outward vs inward remittance charges work.

The inward remittance charges vary from bank to bank. Some top options you can compare include HDFC Bank, Axis Bank, HSBC, IDFC First Bank, and fintech alternatives like Xflow, Wise, Razorpay, Skydo, and PayPal.

The charges you pay for receiving foreign payments in your Indian bank account depend on several factors. These include the speed of transfer, currencies and countries involved, amount received, and the bank or payment provider.

1. Speed of transfer

The speed at which you receive the payment affects the charges you need to pay. For example, standard international transfers typically take 3-5 business days. But if you opt for express or same-day transfers, banks will charge a premium for priority services.

2. Currencies and countries involved

The currency involved also plays a big role. Say you're converting USD to INR. It'll cost way less than converting a less common currency. Additionally, if you receive payments from countries that have advanced banking systems, the charges will be less compared to countries with limited financial infrastructure.

3. Amount received

Sometimes, large transactions can qualify for better rates or lower charges. Smaller amounts, on the other hand, may attract flat fees that might be expensive for the transfer size.

4. Bank or payment provider

Every bank and fintech platform has its own fee structure. If they rely on multiple intermediaries or operate on older, legacy systems, it can increase the remittance cost for you. On the other hand, platforms with modern infrastructure or partnerships with international networks may offer lower fees.

You have two options for receiving money from overseas: through a bank transfer or a Money Transfer Operator (MTO). A bank transfer moves money through networks like SWIFT and often involves multiple intermediary banks. An MTO, on the other hand, specializes in international transfers with faster processing and fewer intermediaries.

Here's how their charges differ:

• Bank transfer charges: Banks use networks like SWIFT to move funds across borders. This includes multiple intermediaries, compliance checks, and currency conversion. This means the final cost will include the SWIFT fees, bank charges, inward remittance fees, and FX markup.

• Money transfer operator fees: MTOs like Western Union, Remitly, etc., specialize in sending money quickly. They usually have simpler processes, competitive exchange rates, and fewer intermediaries. However, they charge transfer fees and currency conversion, which can increase your total cost.

Bank charges are the fees that banks apply when you receive foreign funds in your Indian account. For example, SWIFT fees, inward handling charges, currency conversion margin, etc. On the other hand, fintech platform costs are the fees that global payment platforms charge for cross-border transactions.

Here's a quick comparison of the two charges:

There's no one fixed fee for receiving international payments. There are multiple charges involved, like sending bank fees, intermediary bank fees, receiving bank fees, and FX markup/currency conversion margin.

• Sending bank fees: This is the flat fee that the sender's bank charges for initiating the transfer. It can range between $25 and $50 per transaction.

• Intermediary bank fees: Sometimes, an overseas payment may be routed through correspondent banks. Each of these intermediaries can deduct an additional $10 to $30.

• Receiving bank fees: When the funds finally reach your Indian account, your bank charges an inward remittance fee. This can range from INR 200 to INR 1,000, depending on the bank and account type.

• FX markup/currency conversion margin: If the bank converts foreign currency to INR, it may also add a margin on the exchange rate.

High bank charges for foreign remittance can cause challenges like lower payouts, exchange rate impact, and compliance costs.

1. Lower payouts

When you receive cross-border payments, the flat fees, SWIFT charges, and intermediary fees can quickly eat into your invoice. This can feel especially high if you're receiving small or infrequent payments. On top of these, fintech platforms or banks may apply commission slabs (e.g., ACE structure) that can vary depending on the volume or transaction type. This can make it even harder to predict the final cost.

2. Exchange rate impact

Exchange rates are moving constantly. Say, there's an unfavorable USD-INR change. This can reduce the rupee value you finally receive. Add to it the conversion rate margin applied by the bank, and you'd end up with a lot less than what you expected.

3. Compliance costs

Banks need to meet KYC, AML, and other sanction rules. But the cost of these compliances is passed on to customers. This means extra paperwork, slower processing, and potential add-on charges for you. Plus, you also need to understand and follow regulatory context (LRS, FEMA, RBI guidelines, etc.) to avoid legal hassle.

High bank charges can eat into your profit margins. You can avoid this by selecting the right payment method, negotiating with the provider, and avoiding intermediary banks.

1. Select the right payment method

Traditional SWIFT wires come with high fees and FX margins. You can avoid these by opting for online payment platforms like Xflow that have a transparent fee structure and offer better, mid-market exchange rates.

2. Negotiate with the provider

If you receive cross-border payments often, negotiate with the bank or payment provider for better pricing. Shop around and use competing quotes for lower commission slabs and conversion margins.

3. Avoid intermediary banks

Every intermediary bank involved in the process can charge a fee. Avoid this by asking the sender to route payments through direct correspondent accounts. Alternatively, you can also partner with providers that eliminate these intermediaries.

Xflow makes receiving international payments simpler and cheaper by using local bank rails and a global banking partner. Instead of a SWIFT wire that passes through multiple intermediaries, customers can pay via a local transfer directly into your Xflow receiving account.

This way, you can enjoy:

• Lower fees through local transfers and ACH-style options
• Quick settlements within 1 business day
• Predictable FX with mid-market rates
• No correspondent banks between the customer and your receiving account
• Free FIRA from an RBI-authorized bank
• Flexible withdrawals

Receiving international payments isn't taxable by default. What matters is why you received it. If the payment is for work or services, it will be treated as income. This means you need to declare it in your tax returns under normal slab rates.

On the other hand, if the payment is for exported goods or services, it'll be treated as zero-rated under GST. This means the export receipts are not subject to GST.

Another thing to keep in mind is that if you've paid tax abroad on the same income. In this case, you can claim relief under the applicable DTAA or domestic provisions by filing Form 67. This prevents double taxation.

Xflow is designed exclusively for businesses and freelancers in India who work with global clients. It helps you cut unnecessary costs and get paid faster by offering:

• Transparent FX rates that are close to the mid-market rate
• Zero hidden charges
• Next-day settlements directly to your INR account
• Compliance-ready workflows, including BIRC documentation support

With Xflow, you can save on bank fees and currency conversion margins while keeping the process simple and predictable.