VietNamNet Bridge – Commercial banks have started charging fees on ATM withdrawals without improving their services.

Customers withdraw cash at Military Bank’s ATM booths in Ha Noi.

On January 1 the State Bank of Viet Nam issued Circular No. 35/2012/TT-NHNN on service fees charged to debit cards, formulating the legal framework for fees charged by the banks on debit card holders, especially for ATM transactions.

The goal of the circular, which took effect on March 1, includes relating fees to services and transactions, thus regulating service fees for debit cards to help banks finance part of their investment and operations and to improve service quality.

Fees can be up to VND1,000 per transaction in 2013, VND2,000 in 2014 and VND3,000 from 2015. It’s up to banks to set their fees. Vietcombank, which now holds the largest share of the domestic card market, and Seabank began collecting VND1,000 and VND550 on cash withdrawals from ATM networks on March 1.

Meanwhile, many banks have delayed the collection of fees and some are proposing fees lower than the maximum in order to keep clients.

They include BIDV, Agribank, Vietinbank, Martime Bank, Techcombank, VIB, SHB, NamA Bank, MDB, Tienphong Bank, Baovietbank, DongA Bank, MB, PG Bank, SCB, ANZ, ABBank, Southern Bank, Ocean Bank, Bac A Bank, and Viet Capital Bank.

Agribank will collect ATM fees from March 15. BIDA will charge VND1,000 per cash withdrawal at ATMs in May.

Tran Phuong Binh, general director of DongA Bank, said the bank had 6 million domestic debit cards, but had decided against introducing fees this year because most of its customers were on modest salaries and faced difficulties because of the difficult local and international economy, Binh said.

Some banks had begun charging fees before improving services. The State Bank said banks must supply cash for their ATM within four hours after their ATM run out of money.

Card issuers were also requested to answer their clients’ complaints within five days but banks continued to violate this regulation. The State Bank is drafting a decree to include strict punishments for such offences and has set up teams responsible for checking the quality of ATM.

In recent years, 50 banks have joined the Vietnamese card market, 50 million debit cards had been issued and 15,000 ATMs installed.

Six major banks, Agribank, Vietinbank, Vietcombank, Dong A, BIDV and Techcombank, owned 8,200 ATMs, 70 per cent of the total.

However, most banks have not earned profits from card services, while the cost of installing and maintaining ATMs has increased every year.

Banks expect money collected from fees on inter-bank and ATM transactions will help cover the costs of developing the ATM system.

Source: VNS