FEDAI rules: what your bank may charge you, and why

What is FEDAI, and how is it different from RBI?

FEDAI (the Foreign Exchange Dealers' Association of India) was established in 1958 as the self-regulatory organisation of Authorised Dealer (AD) banks. It is a Section 25 (not-for-profit) company under the Companies Act 1956, headquartered at Maker Tower F, Cuffe Parade, Mumbai. Every bank that is authorised to deal in foreign exchange in India is a member, and membership means agreeing to apply FEDAI's rules to customer transactions.

FEDAI's functions are practical, not regulatory: framing FX rules and guidelines for member banks, announcing daily and periodic rates, training bankers, accrediting forex voice brokers, advising on dealing disputes between banks, and representing member banks to the Government and RBI.

The line between the two bodies matters when you are arguing with your FX desk. RBI is the regulator. FEMA, EDPMS, and the authorisation of AD banks all sit with RBI. FEDAI writes the market-practice rulebook that banks contractually apply to your transactions: which rate leg applies, how many days of transit interest you pay, what happens when a bill goes unpaid. The two are linked (FEDAI's own charge guidelines explicitly reference RBI advice) but a dispute about a transit period or a crystallisation rate is a FEDAI-rules conversation with your bank, not an RBI complaint.

The current rulebook is the FEDAI Rules 10th Edition , effective 1 April 2019 and updated through 30 May 2025 via AR Circulars. Everything in this guide cites that edition.

Why do FEDAI rules apply to your FX deals?

The binding hook is a single sentence. FEDAI Rule 7.5 makes the clause "Subject to the Rules & Regulations of FEDAI" mandatory on every FX contract note your bank issues. That one line contractually incorporates the entire rulebook into your deal (transit periods, interest recovery, crystallisation, delay compensation and forward cancellation charges) even if you never read a page of it. Pull out any deal advice or contract note from your bank and you will find the clause, usually in the fine print at the bottom.

That cuts both ways. The same incorporation that lets the bank recover transit-period interest also gives you the exporter-favouring rules (the 2-working-day credit deadline, the interest refund on early realisation) as contractual rights, not favours.

And FEDAI hands you leverage on charges directly. FEDAI General Guidelines 1. 2 say banks are free to set their own charges, but (per RBI advice) those charges should not be out of line with the average cost of providing the service, and banks must not penalise low-volume customers. Banks must also display their card rates, declare the transaction threshold up to which the card rate applies, and state how often and at what time the card rates are published.

What the FEDAI clause entitles you to ask

• The card rate for any transaction up to your bank's declared threshold. The bank has committed to publishing both the rate and the threshold.
• The publication time of the card rate, so you know which day's rate applies to your deal.
• A justification for outlier charges. Charges out of line with the average cost of the service, or that penalise you for being a small customer, sit against FEDAI's own guidelines.
• The specific rule behind any recovery. Since the rulebook is incorporated into your contract, the bank should be able to name the FEDAI rule for every debit.

How long is the transit period, and what interest will you pay?

Under FEDAI Rule 2.1 , when your bank purchases or discounts an export bill it applies the bill buying rate and recovers transit-period or usance interest upfront. The "transit period" is FEDAI's standardised estimate of how long a bill takes to be paid in the normal course. And Rule 2.3 fixes the Normal Transit Period (NTP) by bill type.

Two caps sit on top of the NTP. Concessional post-shipment finance beyond the NTP is capped at 90 days from shipment. 120 days for exports to countries covered by UN guidelines. And under Rule 2.2 , once the NTP (or the due date, for usance bills) passes without payment, overdue interest starts running.

A quick illustration of when a sight bill turns overdue: you ship on 1 June against a $30,000 foreign-currency sight bill not under LC, which your bank purchases the same day. The bank recovers 25 days of transit interest upfront. If the buyer's payment has not arrived by 26 June (day 26) the bill is overdue, and overdue interest under Rule 2.2 runs from that day until realisation or crystallisation.

What happens when your export bill stays unpaid. What is crystallisation?

When a purchased or discounted export bill stays unpaid past its transit period or due date, the bank does not carry the foreign-currency exposure forever. Under FEDAI Rule 2.1 , the unpaid bill is crystallised (converted from a foreign-currency asset into a rupee liability in your name) at the bank's TT selling rate , under the bank's own transparent, published crystallisation policy. When the buyer's money eventually arrives, the realisation is converted at the TT buying rate .

Count the costs stacked on one late payment: you cross the full TT selling. TT buying spread; you pay overdue interest under Rule 2.2 from the day the bill turned overdue; and you pay the bank's crystallisation fee. That fee is where banks diverge sharply on an identical FEDAI-governed event. Verified schedules: ICICI Bank charges crystallisation/delinking at 0.12%, minimum Rs 2,000, maximum Rs 10,000 (Schedule of Charges w.e.f. 1 April 2026), while Canara Bank charges a flat Rs 1,000 per bill (Forex Charges w.e.f. 02.02.2026). Same rule, same mechanics, up to a 10x difference in fee.

Two things to ask your bank before you ever need them. First, ask for its written crystallisation policy. FEDAI requires the policy to be transparent and published, so a bank that cannot produce one is out of step with the rulebook it invokes on your contract note. Second, know that the crystallisation date drives the rate : the TT selling rate of whichever day the bank crystallises is the rate you are converted at, so the policy's timing rules directly move money.

What does your bank owe you if it credits your money late?

This is the part of the rulebook that runs in your favour, and it is worth knowing cold. Under FEDAI Rule 2.5 , export collection bills are converted at the TT buying rate after the proceeds are credited to the bank's nostro account (its foreign-currency account with a correspondent bank). And the bank must credit you within 2 working days of that nostro credit. If it fails, it owes you compensation at the minimum export-credit rate , plus compensation for any adverse exchange-rate movement in the interim.

Rule 4.5 extends the same discipline to clean inward remittances. The category most e-commerce and advance-paid exporters fall under. The bank must pay the beneficiary within 2 working days of nostro credit, failing which it owes interest at the savings bank rate + 2% plus adverse-exchange compensation. And if the beneficiary stays silent for 5 working days after being notified, the remittance is crystallised.

The practical evidence trail is short: the nostro credit or value date on the bank's credit advice or FIRA, versus the date your account was credited . That comparison is the whole claim. If the gap exceeds 2 working days, cite Rule 2.5 (or 4.5 for clean remittances) and ask for the compensation in writing.

What does cancelling or extending a forward contract cost?

Our hedging guides cover when and how much to hedge commercially; this section is the rulebook behind what the bank charges when a hedge changes. FEDAI Rule 6 governs the mechanics, and three of them surprise exporters.

First: extension is not a rollover. When you "extend" a forward contract, the bank cancels the existing contract at the current rate and rebooks a fresh one at the new rate. On cancellation, the exchange difference is recovered from (or paid to) you: purchase contracts cancel at the TT selling rate, sale contracts at the TT buying rate, and the relevant forward TT rate if the cancellation happens before maturity. Every extension therefore settles the mark-to-market of the old contract in cash.

Second: swap cost is recovered on early delivery whether or not the bank actually undertakes a swap. If you deliver dollars ahead of the contract date, the bank charges the swap cost of adjusting its position. The rule does not require the bank to show it executed one. Interest on any outlay or inflow of funds is handled under Rule 6.6 .

Third. The trap: a matured, undelivered contract is cancelled by the bank within 3 working days of maturity. On that automatic cancellation you forfeit any cancellation gain (unless the delay was beyond your control and is on record with the bank) but you still pay any cancellation loss . The asymmetry is deliberate: letting a contract quietly mature and hoping the move went your way does not work.

What did SPL-03/2026 change for manual shipping bills in EDPMS?

EDPMS is built around shipping bills flowing electronically from Customs. Manually-filed shipping bills (most prominently hand-carry gem and jewellery exports) never auto-flow into EDPMS, so the realisations that later arrive have nothing to match against, and the bills effectively show as never-shipped. GJEPC (the Gem & Jewellery Export Promotion Council) took this up with RBI, and the result is FEDAI Special Circular SPL-03/Trade/2026, dated 4 August 2026 .

The new procedure: the exporter takes the Customs-certified manual shipping bills, together with supporting documents, to their AD bank. The circular's operative sentence, verbatim:

"Upon satisfying themselves through appropriate due diligence regarding the underlying export transaction, the concerned AD bank may approach the respective Regional Office of the Reserve Bank of India for facilitating the upload of such Shipping Bills in EDPMS."

In other words, the AD bank (not the exporter) carries the request to RBI's Regional Office, and the bank's due diligence on the underlying export is the gatekeeping step. If you have manual shipping bills orphaned outside EDPMS, the move is to assemble the Customs-certified copies and the export document trail and put them in front of your bank's trade desk, citing SPL-03/Trade/2026.

Bank FX charge comparison checklist

FEDAI's Member Banks Card Rates page is the single most useful (and least used) tool for comparing what banks charge exporters. It indexes roughly 90 AD banks, with up to three links each: Daily Fx Card Rates , Fx & Trade Charges , and Cross Border Transactions. Documentation. TAT (turnaround times). About 44 banks publish all three. Axis, HDFC, ICICI, Kotak, Canara and Standard Chartered among them.

The six-step comparison

• Find your bank on FEDAI's Member Banks Card Rates page and open all three links. Card rates, Fx & Trade Charges, and the documentation/TAT sheet.
• Note the charge schedule's effective date. Schedules are revised, and a dispute should cite the version in force on the transaction date.
• Pull the specific line items that hit exporters: export bill realisation, crystallisation, shipping bill (SB) regularisation, extension of realisation period, and write-off.
• Compare those line items against at least one other bank. The spread on identical FEDAI-governed events is the whole point of the exercise.
• Ask your FX desk for the card-rate threshold and the publication time. Both of which FEDAI guidelines require the bank to declare.
• Ask for the bank's written crystallisation policy. Banks must have one, and its timing rules decide which day's TT selling rate applies to your unpaid bills.

To show what the comparison surfaces, here are two verified schedules side by side. Identical FEDAI-governed events, very different price tags.

Almost every disputed FX debit resolves into one of three buckets: a scheduled fee correctly applied (accept it, but compare banks for next time), a rate-leg or timing error (dispute it citing FEDAI Rules 2.1. 2.5 and your contract note's FEDAI clause), or a late-credit case where the bank actually owes you compensation under Rule 2.5/4.5. Run the five checks in order before escalating. </> } steps= , , , , , ]} />

An apparel exporter ships on 1 March 2026 against a $50,000 foreign-currency sight bill, not under LC, which the bank has purchased. The buyer doesn't pay. Under FEDAI Rule 2.3 the normal transit period is 25 days, so the bill turns overdue around 26 March; the bank later crystallises it under its published policy. Assume an illustrative TT selling rate of Rs 88.00, making the bill worth Rs 44,00,000. </> } result= >

Both banks apply identical FEDAI mechanics (crystallise at TT selling, realise at TT buying, overdue interest past NTP) but their published tariffs for the same events differ by Rs 8,560 on this single bill.

Related reading: if your buyers settle in rupees through Special Rupee Vostro Accounts, see our SRVA rupee settlement guide ; and for the conduct standards your bank's FX desk itself is measured against, see the FX Global Code explained for bank customers .

Frequently asked questions

What is the normal transit period for export bills under FEDAI rules?

Under FEDAI Rule 2.3, the normal transit period is 25 days for foreign-currency sight bills not drawn under a letter of credit, and 20 days for rupee sight bills not under LC. Rupee bills under LC get 3, 7, or 20 days depending on where the reimbursement is provided, and bills with TT reimbursement under LC get 5 days. Once the normal transit period (or the due date for usance bills) passes without payment, overdue interest under Rule 2.2 starts running, and the bank's crystallisation clock begins. Concessional post-shipment finance beyond the normal transit period is capped at 90 days from shipment, or 120 days for exports to countries covered by UN guidelines.

Can I ask my bank for the card rate instead of a negotiated rate?

Yes, up to a threshold. FEDAI General Guidelines require member banks to display their card rates, declare the transaction amount up to which the card rate applies, and state how often and at what time the card rates are published. For transactions within that declared threshold you are entitled to the published card rate. The guidelines also say (per RBI advice) that bank charges should not be out of line with the average cost of providing the service and must not penalise low-volume customers, which gives you a written basis to challenge an outlier charge.

What rate does the bank use when it crystallises my unpaid export bill?

Under FEDAI Rule 2.1, an unpaid export bill that the bank purchased or discounted is crystallised (converted into a rupee liability) at the bank's TT selling rate, following the bank's own transparent, published crystallisation policy. When the foreign payment eventually arrives, the realisation is converted at the TT buying rate. That means you cross the full TT selling. TT buying spread, on top of overdue interest under Rule 2.2 and the bank's crystallisation fee, which ranges from a flat Rs 1,000 per bill at Canara Bank to 0.12% (minimum Rs 2,000, maximum Rs 10,000) at ICICI Bank.

What can I claim if my bank delays crediting my export payment after the money reached its nostro account?

Under FEDAI Rule 2.5, once an export collection bill's proceeds are credited to the bank's nostro account, the bank must credit the exporter within 2 working days. If it fails, it owes you compensation at the minimum export-credit rate, plus compensation for any adverse exchange-rate movement in the interim. For clean inward remittances (such as advance payments or e-commerce receipts), Rule 4.5 sets the same 2-working-day deadline, with compensation at the savings bank rate plus 2% plus adverse-exchange compensation. Your evidence is the nostro credit or value date on the bank's advice or FIRA compared against the date the funds hit your account.

My shipping bill was filed manually and is not showing in EDPMS. Can my bank fix it?

Yes, since August 2026 there is a procedure. FEDAI Special Circular SPL-03/Trade/2026 dated 4 August 2026 (which originated from GJEPC's representation about hand-carry gem and jewellery exports) lets you take your Customs-certified manual shipping bills and supporting documents to your AD bank. After the bank satisfies itself through due diligence on the underlying export transaction, it may approach the respective Regional Office of the Reserve Bank of India to facilitate the upload of those shipping bills into EDPMS, so your realisations can finally be matched and the bills closed.

Update history

• 2026-08-14 First published.