Why Does the University Receive Less Than You Sent? SWIFT Charges on Indian Remittances Explained

You send USD 25,000 to your daughter's university in Boston, the equivalent of about ₹23.75 lakh. A week later her finance office writes to say only USD 24,950 has arrived. The fee bill is fifty dollars short. Nothing went wrong with the transfer.

What happened is that the money did not travel directly. Your bank in India has no account relationship with her university's bank, so the payment was routed through one or two correspondent banks that bridge the gap. Each one charges a handling fee for the service, and those fees came out of the principal.

Every international transfer carries a small instruction about who pays for that. You can ask your bank to absorb the lot upfront, so the full amount lands. You can let the charges come out of the principal in transit, which leaves the beneficiary short. Or, more rarely, you can ask the beneficiary to pay everything.

On the SWIFT remittance form these three choices sit in a field called 71A, marked OUR (sender pays everything), SHA (shared, and the bank default) and BEN (beneficiary pays everything). Some banks have moved to the newer ISO 20022 standard and show the same three options labelled DEBT, SHAR and CRED. The labels have changed; the rule has not.

For most Indian outward remittances where the exact amount must arrive, university fees especially, the sender-pays option is the right choice. The rest of this guide explains why, with worked examples, and how to make the choice on the form your bank puts in front of you.

 

Why does money disappear between your bank and the beneficiary's bank

The banks in the middle are the reason. When you send an international transfer, your Indian bank often has no direct relationship with the smaller or specialised bank your beneficiary uses abroad. The payment is handed off through one or two correspondent banks, also called intermediary banks, that complete the journey.

Each intermediary charges a handling fee. You cannot see these fees when you set up the transfer, and they vary by route and currency.

A deduction of USD 25 to USD 30 per intermediary is common, and a payment can pass through one or two of them. The total usually lands between USD 20 and USD 60. On a ₹23.75 lakh remittance that is roughly ₹1,900 to ₹5,700.

This is the cost that catches people out. Your own bank's fee is on the receipt. The intermediary deductions happen inside the network and only show up when the beneficiary's statement comes back short.

 

Sender pays everything: what happens when you choose OUR

You send USD 25,000 to a US university and choose the sender-pays option, marked OUR on the form.

Your bank charges its standard outward remittance fee. One or two correspondent banks each deduct around USD 25 to USD 30 in handling fees. The difference is that your bank now tracks every one of these deductions and collects them from you, either upfront as an estimate or later as a reconciliation.

The university sees the full USD 25,000 arrive. That is the whole point of the option.

One technical caveat is worth knowing. This option covers the correspondent chain, not the beneficiary bank's own internal incoming wire fee, which is a matter between the beneficiary and their bank. For most universities and corporate accounts that fee is small or nil. For some retail accounts it can be a separate line on the recipient's statement. The bulk of what goes missing on a shared transfer, though, sits in the correspondent chain that this option covers.

Choose it anywhere a missing fifty dollars creates a problem: tuition invoices, visa-related deposits, medical advances, property purchases, vendor invoices, any payment where the beneficiary is reconciling against an exact number.

 

Shared by default: what happens when you choose SHA

You send USD 5,000 to support a parent staying with family abroad, and you leave the option as the bank set it, which is the shared option, marked SHA.

You pay your own bank's outgoing fee. As the payment moves through the network, an intermediary bank deducts about USD 25 from the principal, and the beneficiary's bank may add an incoming charge of around USD 15. The recipient sees roughly USD 4,960 land in the account.

That is a loss of less than 1%.

For family support, gifts, pocket money for a student abroad, or any transfer where the beneficiary is not reconciling against a fixed number, the shared option is acceptable, and it keeps the sender's bill lower. Many people end up here simply because the bank defaulted to it. On the right kind of transfer that default is fine. On a tuition invoice it is not.

 

Beneficiary pays everything: the BEN option

The third option asks the beneficiary to absorb every fee in the chain, including the sender's own outgoing bank charge, which is deducted from the principal before the payment even enters the network. On the form it is marked BEN.

In personal remittance this is unusual. Most Indian banks restrict it, and many do not offer it on retail outward transfers at all.

If you see this option on a form, the safer assumption is that it does not apply to your transfer. The real decision is between letting your bank cover the charges and letting them come out of the principal, based on whether the exact amount matters.

 

Which option should I use for which transfer

A student paying tuition or a medical advance abroad should have the sender cover all charges. Universities and hospitals invoice a specific number and reconcile against it. A short payment triggers correspondence, sometimes a hold on the application, and the cost of fixing it dwarfs the cost of covering the fees in the first place.

A parent or NRI sending family support, gifts, or pocket money for a student can comfortably use the shared option. The beneficiary is not reconciling against a fixed number, the loss is small in percentage terms, and the sender's bill stays lower.

A business or self-employed remitter paying a foreign vendor invoice should have the sender cover all charges. Suppliers and contractors expect the invoiced amount to arrive whole, and a short payment can read as a partial payment under the contract.

Investment-related remittances, overseas property purchases and large one-off transfers under LRS belong in the same bucket: sender covers everything. These are precisely the cases where the receiving entity records against an exact figure.

 

If your bank shows DEBT, SHAR and CRED

Banks are migrating to the ISO 20022 standard for cross-border messaging, and several now show the equivalent codes on their forms.

DEBT is the same as OUR, the sender-pays option. SHAR is the same as SHA, the shared option. CRED is the same as BEN, the beneficiary-pays option.

If the form shows both sets of codes, or only the new ones, choose the equivalent of what you would have chosen anyway. The migration changes the labels, not the rule about who pays.

 

How can I track a SWIFT transfer and see what was deducted

Every SWIFT payment now carries a 36-character reference called the UETR, the unique end-to-end transaction reference. SWIFT introduced it in 2017 with its gpi service, and it now travels on all SWIFT payments.

Since November 2020, banks on the network must also confirm a payment's status, credited, on hold or returned, under the universal confirmations rule. Together these mean a remittance can be traced through the network in close to real time.

Ask your bank for the UETR when you set up a remittance, or find it on the MT103, the SWIFT confirmation message that records the full transaction. The MT103 also notes the charge option you selected, the amount sent, and the fee field.

If a payment is delayed or the beneficiary reports a shortfall, the UETR is what your bank uses to trace where the deduction happened and which correspondent took it. For students and parents sending tuition, keeping the MT103 with the university paperwork is good practice, and it saves time if the university queries the amount received.

 

Other charges on an outward remittance from India

Three other costs sit on a SWIFT outward remittance, and it helps to separate them from the question of who pays the bank charges so you can compare quotes properly.

The exchange rate margin is the largest and the most easily missed. Banks typically build a 2 to 5% markup into the rate they quote you for converting rupees, it does not appear as a line item, and on a large remittance it is usually bigger than every SWIFT charge in the chain combined.

The rate decides what you pay. The charge option decides what reaches the beneficiary.

GST applies on the conversion service under the standard slabs, capped at ₹10,800 per transaction. It is statutory and identical across every authorised provider in India.

TCS applies on LRS remittances above ₹10 lakh in a financial year. For education and medical remittances the rate is 2% on the amount above ₹10 lakh, with zero TCS on education funded by a loan from a recognised institution, and 20% for other LRS purposes. TCS is an advance income tax payment, not a service fee, and you adjust it against your tax liability when you file your return.

 

Frequently asked questions

 

Why did less money reach the beneficiary than I sent?

The transfer was sent on the shared or beneficiary-pays option, and one or two intermediary banks deducted handling fees as the payment moved through the network. To prevent this on the next transfer, choose the sender-pays option, marked OUR on the form.

 

Which SWIFT charge option ensures the full amount reaches the beneficiary?

The sender-pays option, marked OUR. The sender covers every fee in the correspondent chain, and the full instructed amount reaches the beneficiary.

 

What is the difference between OUR and SHA on a SWIFT transfer?

OUR means the sender pays all SWIFT charges, including intermediary bank fees. SHA, the shared option, means the sender pays only the sending bank's fee, and intermediary or beneficiary bank charges are deducted from the principal.

 

How much do intermediary bank charges cost on a SWIFT transfer?

Each intermediary bank typically deducts around USD 25 to USD 30, and a payment can pass through one or two intermediaries. The total deduction on a shared transfer often ranges from USD 20 to USD 60.

 

Are OUR, SHA and BEN the same as DEBT, SHAR and CRED?

Yes. DEBT, SHAR and CRED are the ISO 20022 versions of OUR, SHA and BEN, with identical meanings. Banks are migrating to the new codes, and some forms now show one or both.

 

How can I track a SWIFT transfer?

Ask your bank for the UETR, the 36-character reference that follows the payment through the network. Your bank can use it to check status and, if needed, trace where a payment was delayed or where a deduction was taken.

 

Does SWIFT gpi reduce intermediary bank charges?

No. SWIFT gpi improves tracking and speed, but it does not change the charge mechanics. The option you select still decides who pays the intermediary fees.

The charge option on the form is one of the few decisions on an outward remittance that directly affects how much money reaches the other end. Matrix Forex is an RBI-authorised AD Category-II dealer and settles SWIFT remittances within 24 hours, with the live interbank rate quoted upfront and no rate markup, and the charge option explained before you sign so the right one is picked for what you are sending.

Visit matrixforex.in to get a quote for your remittance.