SWIFT MTs / Learning brief
Sending money from India to the US: one remittance, start to finish
Your notes
In simple terms / 01
What this means in plain language
A resident individual in India sends dollars to a friend's US account: Form A2 and the Liberalised Remittance Scheme, currency conversion at the sending bank, and a serial MT103 that carries both currencies through one US correspondent to the beneficiary's bank.
When someone in India sends money to a friend in the US, more happens than a simple transfer. The Indian bank first checks the declaration the remitter files, because Indian law requires every foreign remittance to state its purpose and stay within an annual per-person limit. Only then does the bank convert rupees into dollars, at its own exchange rate, and send a SWIFT MT103 to a US correspondent bank it holds a dollar account with. That correspondent settles with the beneficiary's bank across accounts they share, and the beneficiary's bank runs its own compliance check before crediting the money. The payment message itself is unusual for carrying two currencies at once — the dollar amount that actually settles between the banks, and the rupee amount the customer originally asked to send, tied together by the exchange rate the sending bank applied.
Complete lesson / 02
Understand the full idea, step by step
A friend abroad needs USD 4,000. Sending it sounds simple — until you notice that the sender's account is in rupees, the receiver's is in dollars, and Indian law requires a signed declaration before a single rupee can leave the country. What actually happens between "send" and "received"?
Liberalised Remittance Scheme (LRS) — The RBI framework for resident outward remittances
The Liberalised Remittance Scheme lets a resident individual send foreign exchange abroad — for gifts, travel, education, or investment — up to an annual per-person limit, without seeking RBI's approval for each transfer. Ananya's bank checks her declaration and her cumulative remittances for the year before it will touch her money.
- Remitter
- Ananya, resident individual (India)
- Sending bank
- Ganga Bank — Authorized Dealer Category-I
- Declaration required
- Form A2, under the Liberalised Remittance Scheme
- US correspondent
- Liberty Union Bank — holds Ganga Bank's USD nostro
- Beneficiary's bank
- Cascade Bank (US)
- Message
- MT103, serial method, one correspondent hop
| Amount Ananya instructs (originally instructed currency) | INR 3,34,000.00 |
|---|---|
| Exchange rate Ganga Bank applies | 83.50 INR per USD |
| USD amount that actually settles between the banks | USD 4,000.00 |
| Where this lands on the MT103 | Field 33B = INR 3,34,000.00 · Field 36 = 83.50 · Field 32A = USD 4,000.00 |
Conversion happens once, at Ganga Bank, before the interbank message is even built. The MT103 that follows carries both numbers so every bank downstream can see not just what settled (32A) but what the customer originally asked for (33B) and the rate that connects them (36) — fields the message format has always had, exactly for a payment like this one.
Read the steps as text
- 01MessageThe remitter asks Ganga Bank to send dollars to a friend in the USRemitter (India) → Ganga Bank (Indian AD Category-I bank)
The remitter — a resident individual — asks Ganga Bank to remit INR 3,34,000 as USD to a friend's account in the US, and completes Form A2, the FEMA declaration naming the purpose of the transfer (here, a gift to a friend) and confirming the funds are the remitter's own.
- 02ProcessingGanga Bank checks the declaration before touching the moneyGanga Bank (Indian AD Category-I bank)
As the Authorized Dealer, Ganga Bank is responsible for the declaration it accepts: it checks the purpose code is valid and permitted, confirms the remittance (with the remitter's other transfers this financial year) stays within the Liberalised Remittance Scheme's annual per-person limit, and screens the remitter and beneficiary before any conversion happens.
Screening checkpoint: Outbound remittance screening — Remitter and beneficiary names are screened before Ganga Bank converts or sends anything — the cheapest point to stop a problem.
- 03PostingGanga Bank converts the rupees to dollarsGanga Bank (Indian AD Category-I bank)
Ganga Bank debits the remitter's INR account and converts the proceeds to USD at its own card rate — the rate it offers retail customers, which includes its margin over the interbank rate. The converted USD amount is what actually gets remitted; the INR amount debited is what the remitter pays for it.
- DR Remitter's savings account at Ganga Bank — INR 3,34,000.00
- 04MessageGanga Bank sends the MT103 to its USD correspondentGanga Bank (Indian AD Category-I bank) → Liberty Union Bank (US correspondent) · MT103
Liberty Union holds Ganga Bank's USD account (Ganga Bank's nostro), so the interbank MT103 goes there. Because the customer instructed in INR but the interbank leg settles in USD, the message carries both: field 32A is the settled currency and amount (USD 4,000.00), field 33B is the originally instructed currency and amount (INR 3,34,000.00), and field 36 is the exchange rate Ganga Bank applied to convert between them (83.50).
- 05ProcessingLiberty Union validates and screens in the middleLiberty Union Bank (US correspondent)
Every bank in the chain screens independently. Liberty Union also checks that Ganga Bank's nostro account has cover for the debit.
- 06SettlementMoney moves across the books of Liberty UnionLiberty Union Bank (US correspondent)
Both Ganga Bank and Cascade Bank hold USD accounts at Liberty Union. Settlement here is a book transfer in commercial bank money — Liberty Union debits one vostro account it holds and credits the other.
No clearing house is involved — the correspondent's ledger is the settlement venue, in commercial bank money, not central bank money.
- DR Ganga Bank's USD account at Liberty Union (vostro) — USD 4,000.00
- CR Cascade Bank's USD account at Liberty Union (vostro) — USD 4,000.00
- 07MessageThe MT103 continues serially to Cascade BankLiberty Union Bank (US correspondent) → Cascade Bank (beneficiary's US bank) · MT103
Liberty Union forwards the payment instruction to the beneficiary's bank with the full ordering and beneficiary details intact — including the remitter's declared purpose, carried in the remittance information field.
- 08ProcessingCascade Bank validates the incoming paymentCascade Bank (beneficiary's US bank)
Account checks and inbound OFAC screening on every incoming international wire. Only when the account is confirmed and checks pass is the beneficiary credited.
- 09PostingThe beneficiary is creditedCascade Bank (beneficiary's US bank)
Cascade Bank credits its customer. The remitter's friend now has USD 4,000.00 — converted from INR 3,34,000.00 at Ganga Bank, minus whatever margin and fees applied along the way.
- CR Beneficiary's account at Cascade Bank — USD 4,000.00
One remittance, start to finish
- CUSTOMER
Ananya asks Ganga Bank to send USD 4,000 to Marcus, and completes Form A2, declaring the transfer as a gift.
- VALIDATION
Ganga Bank checks the purpose code, confirms Ananya's remittances this financial year stay within the LRS limit, and screens both names — before converting or sending anything.
- LEDGER
Ganga Bank debits Ananya's account INR 3,34,000.00 and converts the proceeds to USD 4,000.00 at its own rate.
- MESSAGE
Ganga Bank sends an MT103 to Liberty Union Bank, its US correspondent, carrying both the settled USD amount and the originally instructed INR amount.
- CLEARING
Liberty Union validates the message and checks Ganga Bank's nostro account covers the debit.
- SETTLEMENT
Liberty Union books the USD 4,000.00 across the vostro accounts it holds for Ganga Bank and Cascade Bank — a book transfer in commercial bank money.
- MESSAGE
Liberty Union forwards the MT103 to Cascade Bank with the full payment details intact.
- VALIDATION
Cascade Bank runs its own inbound OFAC screening and account checks before releasing the credit.
- NOTIFICATION
Marcus's account is credited USD 4,000.00 — the same amount that left Ganga Bank's books, converted once, at the start.
SWIFT MT — ILLUSTRATIVE, NON-PRODUCTION
The message format Ananya's payment travels on — the same MT103 used for any customer credit transfer, carrying whichever fields a given corridor needs.
| Account | Dr | Cr |
|---|---|---|
| Ganga Bank's USD account at Liberty Union (vostro) | USD 4,000.00 | |
| Cascade Bank's USD account at Liberty Union (vostro) | USD 4,000.00 |
The correspondent's own ledger — the settlement venue for this leg, not the customer's account.
Why does the MT103 bother carrying the rupee amount at all — isn't the dollar amount all that matters to the banks moving the money?
The dollar amount is all that matters for settlement between the banks — but the rupee amount and the rate are what let anyone downstream reconcile the payment back to what the customer actually asked for. If Marcus's bank ever needs to answer "how much did the sender originally instruct, and at what rate," fields 33B and 36 are the audit trail. Without them, only Ganga Bank's own internal records would know.
COMMON CONFUSION
“The exchange rate on a cross-border payment is set by SWIFT, or by some central authority, the same for every bank.”
The exchange rate is whatever the sending bank chooses to charge its own customer — its card or retail conversion rate, which includes its margin over the interbank rate. Two banks converting the same INR amount to USD on the same day can quote different rates. SWIFT carries whatever rate the sending bank applied; it doesn't set or check it.
WHAT IF — Cascade Bank's inbound OFAC screening flags Marcus's name as a fuzzy match against a sanctions list entry.
What happens: The funds are not lost or returned — they already settled onto Cascade Bank's nostro at Liberty Union. The credit to Marcus's account is simply held until the alert is resolved.
How it is handled: An analyst compares the full identifying details on file — date of birth, address, the remitter's stated purpose from the MT103 — against the sanctioned party, finds no genuine connection, clears the alert as a false positive, and releases the credit.
FOR NOW, REMEMBER
- Only an Authorized Dealer bank can convert a resident's rupees and send them abroad, and only after checking Form A2 and the Liberalised Remittance Scheme limit.
- Currency conversion happens once, at the sending bank, before the interbank MT103 is even built.
- The MT103 can carry two currencies at once: field 32A (settled), field 33B (originally instructed), and field 36 (the rate) — fields that exist for exactly this situation.
- Every bank in the chain — sending, correspondent, and beneficiary — screens independently; a hold at the end doesn't mean the money is lost, only delayed.
TRY IT YOURSELF
Ganga Bank converts Ananya's INR 3,34,000.00 into USD 4,000.00 at a rate of 83.50 before sending the MT103. Which field carries the amount that actually settles between Ganga Bank and its US correspondent?
TRY IT YOURSELF
Cascade Bank places Marcus's incoming payment on an OFAC hold before crediting him. What does this mean for the money that already reached Cascade Bank's nostro account?
Ananya's MT103 used fields 32A, 33B, and 36 — three of the many numbered fields inside Block 4. See how the message that carried her payment is built, block by block.
KEEP GOINGKey takeaways / 03
Three things to remember
- 01
Only an RBI-licensed Authorized Dealer bank can convert rupees to foreign currency and send them abroad, and only after checking the remitter's Form A2 declaration and the Liberalised Remittance Scheme's annual limit.
- 02
Currency conversion happens once, at the sending bank, before the payment ever leaves India — the interbank MT103 that follows already carries the converted amount.
- 03
The MT103 carries both currencies at once: field 32A is the settled amount in the interbank currency, field 33B is what the customer originally instructed, and field 36 is the exchange rate that connects them.
Practical use cases / 04
Where you would use this
An operations analyst at an Indian bank explains to a customer why their transfer needs a signed declaration before it can be converted and sent.
A payments trainee reads a real MT103 for a cross-currency remittance and correctly identifies which field is the settled amount and which is the original instruction.
A compliance analyst at the receiving US bank investigates a name-match alert on an inbound remittance and clears it without returning the funds.
Worked example / 05
Put the idea into a real situation
Ananya, in Mumbai, wants to send USD 4,000 to her friend Marcus, who banks in the US. Her bank, Ganga Bank, is an Authorized Dealer — only such a bank can legally convert her rupees and send them abroad. She fills out Form A2, declaring the transfer is a personal gift, well within her Liberalised Remittance Scheme limit for the year. Ganga Bank checks the declaration, screens both names, then debits her account for INR 3,34,000.00 and converts it to USD 4,000.00 at its own rate of 83.50. The interbank MT103 it sends to its US correspondent, Liberty Union Bank, carries both figures: 32A shows USD 4,000.00 (what actually settles between the banks) and 33B shows INR 3,34,000.00 (what Ananya originally asked to send), with 36 recording the 83.50 rate that connects them. Liberty Union settles with Marcus's bank, Cascade Bank, across the dollar accounts they share, and Cascade Bank credits Marcus after its own screening clears. All institutions and figures here are fictional.
Evidence & review / 07
Evidence & review
Personal outward remittances from India under the RBI's Liberalised Remittance Scheme, routed as a SWIFT MT103 through a correspondent bank to a US beneficiary account.
What this brief simplifies: A single USD correspondent and one compliance-hold scenario stand in for corridors that may add intermediary banks, tax withholding, or additional holds.
Sources for this brief4
- Official requirement
Liberalised Remittance Scheme (LRS) — FAQs ↗ — Reserve Bank of India · Liberalised Remittance Scheme: annual limit, Form A2, Authorized Dealer banks
The annual limit is non-cumulative and does not carry forward; remittances beyond it require prior RBI approval. Tax-collection-at-source thresholds and the exact declaration format are set separately and change more often than the scheme's core limit — check the RBI page for current detail.
- Official requirement
Swift Standards MT (annual standards releases) ↗ — Swift · MT103 fields 32A, 33B, 36
Full field-level specifications live in the Swift Knowledge Centre User Handbook behind a swift.com login; content here relies on public summaries. Swift ended MT-to-ISO 20022 coexistence for in-scope cross-border payment instructions (for example MT103 and MT202) in November 2025; MT statement messages are being phased out on a separate timeline.
- Market practice
Correspondent banking (final report) ↗ — CPMI, Bank for International Settlements
Published in July 2016; its statistics cover 2011-2015 and are dated, but the definitions and arrangement types remain widely used.
- Simplified educational illustration
Payments Signal editorial teaching models — Payments Signal
What this simplifies: One correspondent bank; tax collected at source (TCS) and the full Form A2 workflow are omitted. Names, amounts, and the exchange rate are fictional.
Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.