VietNamNet Bridge – Commercial banks all complain that they have been
incurring with ATM services, but they still keep developing ATM services.
Experts said the prices of ATMs vary depending on the technologies, but an ATM
is priced no less than $20,000. Banks not only have to pay for the machines, but
also spend money to maintain the ATMs’ operation, including the fees for
premises for ATMs, depreciation, equipment maintenance, management and labor
cost, and software licenses.
By the end of 2012, Vietnam had had some 15,000 ATMs, which means that banks
have to keep at least VND15 trillion at ATMs (the average sum of money kept in
an ATM is VND1 billion). Banks have to pay interests for the sum of money, even
if the money still lies idle in ATM. If noting that the average interest rate is
2 percent per annum, banks would have to pay VND300 billion a year.
Banks also have to spend money to put cash into ATMs. A banker in HCM City said
his bank has to put VND1 billion in banknotes to every ATM once every three
days. The sum of money is enough for 750-900 transactions made in HCM City.
The Vietnam Bank Card Association, after calculating the expenditure items, has
reported that it costs VND9,000 for every transaction with ATMs on average.
However, the fees are different for different banks. Vietcombank, for example,
has announced the cost of VND6,000 per transaction.
Suppose that the cost is VND9,000 per transaction, and that every ATM serves 100
transactions per day, banks would have to spend VND4.9 trillion a year for their
ATM systems, which means that every bank needs to spend VND100 billion a year.
This is the reason banks have cited to insist on the charging of fees on ATM
transactions. After a lot of failures, banks have successfully got the nod from
the State Bank of Vietnam to charge VND1,000 for every inner-network
transaction, commencing from March 1, 2013.
However, analysts say, while banks have been complaining about the big expenses
they have to pay to maintain their ATM networks, they have never talked about
the benefits ATMs can bring to them.
ATMs not only benefit people, because they don’t have to come to bank branches
to make transactions, but they also benefit banks as well, because they help
reduce the costs for making transactions with clients. Banks don’t have to hire
more workers and spend higher costs to receive clients on Tet days, for example,
or rush days, when the demand for cash increases significantly.
Especially, ATMs help banks mobilize huge capital from the public at very low
costs. Suppose that there is VND50,000 in every account, banks would have a huge
capital of VND1.2 trillion, if noting that only 50 percent of cards are active.
In order to mobilize the sum of capital from the public as term deposits, banks
would have to pay the interest rate of 8 percent per annum, which is the current
ceiling deposit interest rate as stipulated by the State Bank.
However, in fact, banks only have to pay 2 percent per annum, because the money
left in bank accounts is considered as demand deposit. As such, banks can save
VND75 billion when they can mobilize capital at low costs.
If the minimum account balance is raised to VND500,000 instead of VND50,000, the
benefits banks can enjoy would be 10 times higher. Therefore, VIB Bank has
suggested not to charge fees for cash withdrawal transactions on the card
holders with the minimum balance of VND500,000 in their accounts.
TBKTVN