Vietnamese banks advised to take cautious steps in raising fees

A myriad of fees


For the past month, Ha Thanh Huong in Hanoi has received several text messages notifying her that various service charges have been debited from her bank account. A rough estimate shows that each month Huong is charged VND11,000 for the SMS banking service and another VND11,000 for the mobile banking service.


Previously, the charge was VND8,800 and has only been increased recently. But these are just two of a multitude of fees she has to pay, with others for card management, account maintenance, money transfers and paper statements.


Furthermore, under her bank’s policy change, a fee of at least VND10,000 is imposed when depositing money into her account at one of its transaction offices if she forgets to bring a form of identification to demonstrate that she is the real owner of the deposited account.


Huong is even more upset as she recently learnt that her bank plans to raise its cash withdrawal fees.


Like Huong, many customers have also expressed their disappointment at the banks’ move to raise their fees one after another in such a short space of time.


Le Xuan Hung, owner of a private enterprise in Hanoi, is also bewildered by the bank fees he is charged each month.


“My company maintains a non-term deposit of VND1 billion at the bank but I have to pay various fees every month. Recently I was surprised to learn that the SMS notification fee has gone up from VND50,000 to VND200,000 a month and the internet banking fee from VND350,000 to VND1 million a year. I did not receive any text messages or emails about the changes from the bank in advance” Hung said.


Transparency needed


While consumers are strongly resenting the fee hikes, banks are citing various reasons for their policy changes. The issue is how to harmonise the interests of both sides. Customers have the right to question their banks’ transparency over the fees and the fee increase roadmap.


According to Dao Minh Tuan, deputy general director of Vietcombank, a circular issued by the central bank in 2012 allowed commercial banks to raise the maximum ATM cash withdrawal fee to VND1,000 in 2013, VND2,000 in 2014 and VND3,000 from 2015 onwards.


But in fact, the ceiling has been imposed by a number of banks and the increases are in line with the regulation and were already calculated six years ago, Tuan explained.


He added that the ATM maintenance costs are currently well above that which the banks are charging their customers.


Tuan said, “In Vietnam, 97% of card transactions are cash withdrawals rather than paying for goods and services. That is why cash machines are always overburdened and wearing out faster than in other countries. The fee of VND7,000 to VND10,000 for a withdrawal already includes all costs, including maintenance for many years.”


Although the ATM fee increases are in accordance with government rules and an approved roadmap, experts say banks still meet opposition from customers because of their lack of transparency.


For example, although banks frequently send service promotion ads and security warnings to their customers, they rarely send out information on fees through text messages or emails. Customers are only aware of the fee increases by visiting their banks’ websites or through mass media.


Soon after a number of major banks announced their intention to raise the ATM withdrawal fee from VND1,100 to VND1,560, the central bank promptly asked them to consider halting the change.


Commercial banks have also been urged to increase their transparency to ensure their customers fully understand the fee schedule as regulated.


A central bank official said “Our stance is to protect the legitimate rights of customers and balance the interests of banks and their customers in order to create a harmony between the service providers and service users. As such, if banks plan to raise fees, they need to work out and publicise a roadmap in order to procure the customers’ agreement.”