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Banks attempting to collect ATM fee, for the fourth time   2011-05-12 - Viet Nam Net

From June 2011, when withdrawing cash from the ATMs of the banks which are not the issuers of the clients’ cards, clients will have to pay 5500 dong per transaction instead of 3300 dong, if the proposal by the members of the Card Association is approved by the State Bank.




Banks say fee collection is a necessity





Chair of the Card Association, which represents some 40 banks, Nguyen Thu Ha said on Tuoi tre that the tentative raising of the intra-network transaction fee (holders of the cards of one bank make transactions with ATMs of other banks) aims to offset a part of the expenses banks have to spend to maintain the ATM system.




According to Ha, it is very costly to develop the ATM network. Especially, banks recently have to spend more money to ensure security for ATMs in the context of continuous ATM attacks.




Ha said that in fact, some banks have charged the fee of 5500 dong since late 2010, and “clients have not made any complaints about the fee”.




She went on to say that banks are also going to make proposal on collecting fees on inner-network transactions (card holders make transactions with the ATMs of the card issuer). This is for the fourth time commercial banks attempt to collect fees from the transactions of withdrawing money from ATM. The banks proposed to collect fees three times in the past, but their proposal was refused by the State Bank.




Trinh Thuong Thuc, an executive of Vietcombank HCM City Branch, said that with the fee of 3300 dong per intra-network transaction, banks are incurring loss. In a talk with local press in September 2010, Thuc said that the expenses banks have to spend to maintain ATMs have become higher and higher.




In general, banks have to pay 10 million dong a month to be able to install ATMs on an advantageous position, and 3-5 million dong on less advantageous positions. Also, they also have to spend money on transmission line, staff and security officers. The maintenance fee alone costs 500 million dong per ATM per annum.




The banks, which have a large ATM network, have to keep the balance of  at least 400-500 million dong per ATM. As for the banks with thousands of ATMs, the unprofitable sum of money could be 500-600 billion dong.




Besides, banks believe that the fee collection will help encourage banks to make heavier investment in installing more ATMs. Currently, many banks issue cards, but they do not intend to develop the ATM network. As a result, heavy burden has been put on big banks. An ATM now reportedly serves 2700 card holders.




Banks’ attempt raises strong opposition




Commercial banks, while insisting on the permission to collect fees, have also warned, that if the State Bank does not approve the proposal on fee collection, banks will stop installing new ATMs. Vietcombank, for example, has planned to install many more ATMs in 2011, but has halted the plan.




By the end of 2010, Vietnam had had 11,700 ATMs, an increase of 20 percent in comparison with the end of 2009.




If banks do not install new ATMs, this will cause to the overloading of ATMs. Especially, card holders will have to queue to withdraw money from ATMs at the end of months or on Tet days.




The attempt by commercial banks to collect ATM fee has raised a strong opposition on forums. “Banks should encourage people to open bank accounts and use cards rather than collecting fees for ATM transactions. This is really an unreasonable business policy,” HuynhLam wrote on a forum, stressing that card holders now have to pay many other kinds of fees already, including the annual fee.




Some clients have warned that if banks collect fees, people will not use ATMs any more. If so, the State will fail to encourage non-cash transactions.




In principle, ATM cards can help ease the burden on banks, because people can make transactions with ATMs instead of bank officers. If card holders have to pay fees, they would rather go to bank branches to get money, which will lead to the overloading, the thing which once occurred in the past.

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