Business
Commercial banks required stopping ATM fee hike
The State Bank of Vietnam (SBV) has directed commercial banks to stop increasing ATM cash withdrawal fees at this time to create consensus in public opinion.
The move was made after the public expressed their disagreement with fee hike on ATM transactions and e-banking made recently by multiple banks.
Vietcombank increased its SMS banking fee from VND8,800 to VND11,000 in March, and charges VND5,500 per cash transaction of VND50 million and above instead of VND3,300.
BIDV has hiked its ATM cash withdrawal fee to VND1,650 per transaction, with value-added tax included, for each transaction in its system since May 4.
VietinBank has also revised up its transaction fees to VND2,200 for debit cards and VND1,650 for C-Card and S-Card from the previous VND1,100. The new fees, including value-added tax, have been in force since May 5.
Eximbank charges customers VND11,000 a month each for e-banking, mobile banking and SMS banking.
Agribank is the latest to announce hikes, saying it would increase ATM withdrawal fees from VND1,000 to VND1,500 (VAT excluded) per transaction from May 12.
According to SBV, it regulates a fee framework for ATM cash withdrawal and commercial banks must base on it to set their own fees. The banks’ recent fee hike doesn’t violate the SBV’s regulation.
However, SBV noted, for any fee adjustments, besides making information transparent, banks should look into the interests of customers to ensure a balance between the two sides.
Representatives from these banks also confirmed they had received the SBV’s instructions and would devise a concrete plan to stop raising handling charges.
Dao Minh Tuan, chairman of the Vietnam Bank Card Association, said at a recent banking forum that the fee hikes by local banks are done as planned.
The central bank’s Circular 35, which came out in 2012, allows banks to collect ATM fees from March 2013. The maximum fee of VND3,300 for each transaction has been permitted since 2015 but most banks have kept their fees at either VND1,100 or VND1,650.
The increase in service fees is part of the banks’ overall plan to expand non-interest income, besides regular credit loans, in the context of controlled credit growth rates via SBV’s imposed quota of less than 20 per cent annually, as opposed to banks’ average growth of 30 to 40 per cent in 2018, Tuan added.
However, commercial banks should focus on other services to offset losses, rather than increasing ATM charges, said Tuan.
Remaining banks such as ACB, VIB, Techcombank, or VPBank still maintain a free-of-charge money transfer between accounts at the same bank, with Techcombank going as far as keeping interbank transactions free as well.
SBV’s data showed that the total value of transactions via ATMs and POS last year surged sharply by 34 percent against the previous year. By the end of last year, Vietnam had some 17,558 ATM and 268,813 POS, a year-on-year increase of 10 per cent.
The ratio of cash withdrawal at ATMs declined to 6.86 percent late last year against 15.71 percent in 2016.
Director of SBV’s Payment Department Pham Tien Dung said that payments via internet and mobile phones last year soared by more than 50 percent, while inter-bank transactions also witnessed a strong growth at 30 percent, both in volume and value, with a daily transaction revenue of some $10 billion.
Dung attributed the rise to the banking industry’s efforts to apply technological advances in the fourth industrial revolution to develop payment infrastructure, and enhance payment security and safety in recent years.
The SBV has also focused on streamlining legal framework and applying technologies in non-cash payment besides promoting management and supervision in payment.
Vietcombank increased its SMS banking fee from VND8,800 to VND11,000 in March, and charges VND5,500 per cash transaction of VND50 million and above instead of VND3,300.
Many banks have increased ATM cash withdrawal fees recently
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VietinBank has also revised up its transaction fees to VND2,200 for debit cards and VND1,650 for C-Card and S-Card from the previous VND1,100. The new fees, including value-added tax, have been in force since May 5.
Eximbank charges customers VND11,000 a month each for e-banking, mobile banking and SMS banking.
Agribank is the latest to announce hikes, saying it would increase ATM withdrawal fees from VND1,000 to VND1,500 (VAT excluded) per transaction from May 12.
According to SBV, it regulates a fee framework for ATM cash withdrawal and commercial banks must base on it to set their own fees. The banks’ recent fee hike doesn’t violate the SBV’s regulation.
However, SBV noted, for any fee adjustments, besides making information transparent, banks should look into the interests of customers to ensure a balance between the two sides.
Representatives from these banks also confirmed they had received the SBV’s instructions and would devise a concrete plan to stop raising handling charges.
Dao Minh Tuan, chairman of the Vietnam Bank Card Association, said at a recent banking forum that the fee hikes by local banks are done as planned.
The central bank’s Circular 35, which came out in 2012, allows banks to collect ATM fees from March 2013. The maximum fee of VND3,300 for each transaction has been permitted since 2015 but most banks have kept their fees at either VND1,100 or VND1,650.
The increase in service fees is part of the banks’ overall plan to expand non-interest income, besides regular credit loans, in the context of controlled credit growth rates via SBV’s imposed quota of less than 20 per cent annually, as opposed to banks’ average growth of 30 to 40 per cent in 2018, Tuan added.
However, commercial banks should focus on other services to offset losses, rather than increasing ATM charges, said Tuan.
Remaining banks such as ACB, VIB, Techcombank, or VPBank still maintain a free-of-charge money transfer between accounts at the same bank, with Techcombank going as far as keeping interbank transactions free as well.
SBV’s data showed that the total value of transactions via ATMs and POS last year surged sharply by 34 percent against the previous year. By the end of last year, Vietnam had some 17,558 ATM and 268,813 POS, a year-on-year increase of 10 per cent.
The ratio of cash withdrawal at ATMs declined to 6.86 percent late last year against 15.71 percent in 2016.
Director of SBV’s Payment Department Pham Tien Dung said that payments via internet and mobile phones last year soared by more than 50 percent, while inter-bank transactions also witnessed a strong growth at 30 percent, both in volume and value, with a daily transaction revenue of some $10 billion.
Dung attributed the rise to the banking industry’s efforts to apply technological advances in the fourth industrial revolution to develop payment infrastructure, and enhance payment security and safety in recent years.
The SBV has also focused on streamlining legal framework and applying technologies in non-cash payment besides promoting management and supervision in payment.
