I am in India. In the past, I have done contracting jobs with a European Company. The European Company remitted money to vendors & contractors in India.
For me, my contracted rate was in Dollars. So the European Company transferred money in Dollars to my Indian Bank Account throw SWIFT. The Bank converted the money based on the exchange rate of the day & also levied a small forex conversion tax on it.
The company also paid some vendors in India. For e.g. if I required buy something from an Indian vendor, I would order it from the vendor - the vendor would send across an invoice in Indian Rupees to me & I would forward it to the European Company & they would SWIFT transfer the money into the vendors account. However, the transfer was different in case of the vendor payment. The European Company would transfer money in Rupees to him from their Bank - i.e. he would always receive the exact amount in Rupees in his account as per the invoice - i.e. it did not depend on the exchange rate. I can imagine this happening by the European bank transferring the money exactly as per day's rate (though practically even this is difficult because it took a day or two for the money to show up in my account). However, the bigger thing was in my account, the item showed as $ converted to rupees - i.e it would show as (assuming the company paid me 100$)
Something Something 100$ @ 65 Rs = 6500 Rs. Credit Forex Conversion Tax xx.xx Debit
Whereas in the vendors account it would show up as
Something Something 10000 Rs. Credit
Also, the receiving bank doesn't levy the forex conversion tax.
So I want to how exactly does this work - how do you remit money from another country in a different currency in such a way that the receiving bank doesn't see the foreign currency at all?