International wire transfers are
executed via standard message format MT103 in the SWIFT messagin platform. In this article, we’ll discuss the
different options available for foreign bank charges.
Please get familiar with the below terms which will be
used in our below discussion.
Remitter: one who is initiating a
foreign remittance
Beneficiary: one to whom the funds is
being remitted
Remitter's bank: the bank where the
applicant holds an account and from where the MT103 is being sent
Beneficiary's bank: the bank where the
beneficiary holds an account and where the funds will finally be credited
There are 3 types of foreign bank
charges – BEN, SHA and OUR.
Let’s discuss these in details below:
1. BEN
When BEN is selected, all the charges
related to the remittance is borne by the beneficiary.
For example, if the remittance is for
USD 100.00 and the charges of the remitter's bank is USD 5.00, then this amount
will be deducted from the remittance amount. The amount mentioned in the MT103
will be USD 95.00
2. SHA
When SHA is selected, the remitter's
bank charges are born by the applicant and the beneficiary's bank charges are
borne by the beneficiary. The beneficiary bank deducts its charges before providing credit to the beneficiary.
For example, if the remittance is for
USD 100.00 and the charges of the remitter's bank is USD 5.00, then this amount
will be separately recovered from the remitter. The amount mentioned in the
MT103 will be USD 100.00
3. OUR
When OUR is selected, all the charges
related to the remittance is borne by the remitter. In this case, the beneficiary received full amount.
For example, if the remittance is for
USD 100.00 and the charges of the remitter's bank is USD 5.00, then this amount
will be separately recovered from the remitter. The amount mentioned in the MT103
will be USD 100.00 In addition to this the charges of the beneficiary's bank is also recovered from the remitter. This is recovered at a later date when the claim is received from the beneficiary's bank.
