Techcombank has raised cash-withdrawal fees to prevent Vietnamese from flocking to Cambodia to withdraw millions of dollars from Cambodian ATMs to benefit from the difference in exchange rates.
From now, withdrawing foreign currency and cash is subject to a fee of 4% and 3% respectively.
This means that holders of cards issued by Techcombank must pay at least 7% on the withdrawn cash if they want to have money taken from ATMs in Cambodia. The new fee is 2.5% higher than before.
A Techcombank representative told Tuoi Tre the reason for the fee hike is to prevent Vietnamese cardholders from withdrawing money in Cambodia and selling them back to profit from the difference between official and unofficial exchange rates.
The Vietnamese government sets the exchange rate at roughly VND19,500 to the US dollar, though the black market rate – also used legally by money changers in Cambodia – is about VND21,000 to the dollar.
The withdrawals the Vietnamese have made from Cambodian ATMs come from home accounts, denominated in dong with the dollars received being converted at the official exchange rate.
The Vietnamese arbitragers would change these dollars for dong with Cambodian money changers or black market traders in Vietnam, profiting from the discrepancy.
While most Vietnamese banks charge international transaction fees to make up for the difference between the official and unofficial exchange rates, Techcombank’s fees were unusually low until now.
The Phnom Penh Post cited Stephen Higgins, CEO of ANZ Royal Bank, as saying that Techcombank cardholders have withdrawn at least US$20 million in cash from Cambodian ATMs this month.
Although transaction fees eat into their profits, Higgins estimated that the cardholders stand to earn roughly $20,000 for every $1 million withdrawn.
Higgins added that Techcombank could have lost about $1.5 million from the scheme.
Although Cambodian banks are not losing money, the incident has caused annoyance to Cambodians who could not withdraw money from cleaned-out ATMs.
According to the Phnom Penh Post, ACLEDA Bank and ANZ have blocked Techcombank cardholders from using their machines, and Higgins said the National Bank of Cambodia sent out warning Friday about the scheme.
Vietcombank recently also encountered a similar problem.
Trinh Thuong Thuc, head of the Card Service Department of Vietcombank Ho Chi Minh City said that his bank has also raised fees to withdraw foreign currency for those using MTV MasterCard to 6%.
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