SEOUL, South Korea - Because regulators are not empowered to limit the ceiling on ATM access charges, several large commercial banks have hiked the fees over the past few years. More increases are planned.
According to a report in the Korea Times, Chohung Bank and Shinhan Bank will increase ATM service fees by 25 percent in April.
The two banks' customers, who withdraw cash from ATMs owned by other banks, will pay 1,000 won (U.S. 85 cents) in service charges; current fees are 800 won (U.S. 68 cents).
The growth rate of 25 percent is 10 times higher than the nation's overall consumer price growth rate of 2.5 percent in 2003.
According to the Korea Times, most Korean banks are also hiking fees for money remittances and transfers to increase fee-based income. Fees for remitting money through tellers at Kookmin, Koram, Shinhan and Korea Exchange banks rose to 4,000 won (U.S. $3.40) or more when customers remit more than one million won (U.S. $854).
An official at the Financial Supervisory Service (FSS) said regulators have no right to order banks to reduce service fees. "The Korea Financial Telecommunications & Clearings Institute will be advised to arrange a meeting of executives to discuss ways of minimizing fee hikes,' the official said.
But local bankers and regulators hinted that, in the face of the business slowdown, the possibility that banks will agree to cut service fees is low.
