News

Are Vietnam banks really losing money on ATMs?

September 17, 2012

Vietnam banks say they're running in the red with their ATM operations. However some financial experts question whether this really could be the situation, saying that it's more likely just a case of poor management.

An article by VietnamNet Bridge laid out the numbers on bank costs and transaction fees and found that, in fact, banks should be making 350 million dong ($16,782) on every one of their ATMs every year.

The article's calculations are based on the fact that in order to use the ATMs, cardholders must own a bank account — and the apparent premise that they would not choose to have a bank account if it didn't grant them access to ATMs.

The article says that banks make a differential interest rate of 7 percent on the 70 trillion dong ($3.36 billion) deposited in consumer accounts. In addition banks collect annual fees on every account and approximately 3300 dong (15 cents) on every inter-bank transaction.

Banks, on the other hand, say they are struggling to pay the costs of equipment, space rental and maintenance for the country's 13,920 ATMs. It was just this May that the state bank granted its approval for the collection of ATM fees.

For more on this topic, visit the installation/deployment research center.