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Banks considering collecting ATM fees, again   2008-11-18 - VNE

Commercial banks now, once again, attempt to collect fees for ATM cash withdrawals after their plan previously faced strong opposition from clients. The expected fee level is VND 1,000 per transaction. The time of application would be set up at a later date, depending on the approval by the State Bank of Vietnam.


Le Dinh Song, Representative from the Vietnam Card Association, said that the association has reported to the State Bank of Vietnam the plan of collecting ATM fees. The proposed fee level remains unchanged at VND 1,000 per transaction (cash withdrawal or money transfer at ATMs).


Some commercial banks said they plan to begin collecting fees in December, while others said they would start the plan the next year.


Prior to that, the card association had to delay the plan on collecting ATM fees commencing on July 1, 2008, as the fee collection plan faced strong opposition from the public. At that time, banking experts also admitted that the fee collection plan proved to be unfeasible, since the inflation rates were high in June and July, while the bank services’ quality still showed a lot of shortcomings.


Meanwhile, clients feel that banks should not collect fee from clients, when they can get benefit already from the low-interest rate money on clients’ accounts. Currently, clients have to keep the balance of VND 50-100,000 at minimum on their accounts. Meanwhile, clients still cannot enjoy good services from banks. They sometimes cannot withdraw money on holidays or the weekends.


However, commercial banks have been insisting on collecting ATM fees. Vietnam now has some 10 million card holders and some 10,000 ATMs. An ATM, which costs several hundred million VND or one billion VND, can run for five years only which then need to be upgraded. Besides, banks have to pay some VND 200 million for each ATM every year for hiring the places for ATM, maintenance and security fee. If counting on the card issuance fee, ATM system management and run, banks have to spend VND 5,000-6,000 per transaction with ATMs.


Banks also have to maintain big volumes of cash at ATMs in order to serve clients’ cash withdrawal, from several hundreds millions VND to one billion VND at each ATM. This means that some VND 10 trillion lies idle at ATMs each day which cannot be used by banks.


Currently, the member banks of BankNet (the card alliance, the members of which are BIDV, Vietinbank and Agribank) now collect fees from the clients of other banks. For example, BIDV’s clients, who withdraw cash from Vietinbank’s ATMs, have to pay fee for their transactions. The clients of Smartlink, (another card alliance, including VIetcombank and nearly 20 joint stock banks, which has connected with BankNet) also have to pay fee when making transactions with the ATMs of BankNet’s member banks


For every inter-bank transaction, the card-issued banks have to pay VND 3,000 to the target banks and the finance switching centre (BankNet or Smartlink). Every bank has its own policy which decides if clients have to pay all the VND 3,000 or a part of the sum.

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