As having more than 10 million individual customers, the adjustment of a number of service fees by Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) in early March has created a heated debate among the public, forums, and social networks. In the trading groups on Facebook, many users are demanding to boycott Vietcombank’s services and urging users to switch to another bank account.
Although representative of Vietcombank affirmed that the service fee adjustment is associated with the launch of dozens of new services with cooperation with hundreds of suppliers, etc., it still seems to be a very urgent matter.
From the perspective of experts, the increase of bank fees is understandable as banks want to raise revenue from services instead of relying only on lending. This is in line with the policy to restructure the banking sector in order to help banks develop sustainably, said Dr Nguyen Tri Hieu, a banking expert.
Meanwhile, talking to reporter of Bao Dau Tu, lawyer Bui Quang Tin, founding director of Bizlight Business School said that the fee increase of Vietcombank is reasonable. “At present, the demand of people for banking services is increasingly high and requirements on security investment are also growing. Thus, banks’ fee raise is understandable”, said Tin.
Tin also hopes that with the increase in fees, banks will enhance the quality of service, especially to ensure better security in order to avoid incidents such as loss of capital.
Too many types of fees
The recent increase in fees of Vietcombank mainly targets electronic banking transactions (Internet Banking and Mobile Banking). This shows that the bank has been well in advance as its number of payment transactions and online transfer are increasing rapidly.
However, in the context when electronic payment is still in an early stage, the government is introducing a number of policies and measures to promote non-cash payment, the increase of bank fees may cause negative effects.
Currently, most banks are offering dozens of fees to cardholders. If the fees continue to rise and more types of fees for Internet Banking services, the objectives of the Non-cash Payment Development Scheme in Vietnam in 2016-2020 period will be affected by 2020, because the fees for using bank accounts and bank cards have reached hundreds of thousands of dong a year.
Therefore, despite agreeing the service fee increase to reduce dependence on lending, Dr Hieu said that bank charges in Vietnam are too high. The disadvantage of bank charge raise will put a negative impact on the non-cash payment policy. Moreover, objectively speaking, Vietnamese banks are charging too much, including many unreasonable charges that banks in other countries and even in the US are not applying.
According to Dr Hieu, it is unreasonable if banks use customer deposits and non-term capital in customers’ accounts to make profit but still collect many types of fees such as account maintenance fee, account information lookup fee, etc.
Vietcombank is currently the most profitable bank in the system, partly thanks to the huge non-term deposits in the mobilisation structure. However, with the adjustment of fees, Vietcombank perhaps will lose a large number of individual customers. This will be the opportunity for many other banks in the context when retail competition is very fierce. At present, there are many medium-sized banks with good services and technologies and reasonable fees such as VPBank, VIB, TPBank, and Techcombank, etc.
