Importers hit as banks slap fees on dollar sales

Banks are demanding additional fees to sell dollars that take official rates almost to black-market levels, causing importers anguish.

Many complain that they are forced to pay VND19,850 - VND19,900 for a dollar while the official rate is only VND19,500.

A Ho Chi Minh City-based fashion firm owner told Tuoi Tre she plans to buy $1 million to pay for imports during the year-end peak season, but would have to pay service fees of VND400 million (US$20,500), meaning the actual dollar rate will be VND19,900 and not VND19,500.

A paper importer said he will lose some VND2.8 billion on a consignment worth $7 million this month.

Asked about the fees, several banks explained they buy dollars from exporters at negotiated prices that are quite close to black-market rates due to the dollar shortage. They earn just VND5-VND10 per dollar, they claimed.

In what is a double whammy for buyers, banks do not issue invoices for the fee. “If there are no invoices, the fees will be treated as profits and taxed,” a director of a paper import company said.

It is unclear where Vietnam will get its dollars in the remaining months this year, Lao Dong (Labor) newspaper said.

It ruled out gold exports as a source saying the country recently began to import three tons of the precious metal to meet surging demand.

Around 56 tons were exported in the first eight months for $2 billion.

Mounting demand for the greenback to repay loans that will fall due at the peak year-end season is also expected to put pressure on the dollar rate.

The Ministry of Planning and Investment forecasts the trade deficit to reach $10.1billion this year.

The Asian Development Bank revealed last Friday that Vietnam’s forex reserves are enough for eight weeks’ imports, adding that they may not rise by much in the last quarter.

The country’s traditional sources like foreign direct investment, portfolio investment, and overseas remittances have not seen robust growth, the newspaper added.

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Banks again fail in attempt to charge ATM users

Photo: Tuoi Tre

With the central bank again rejecting their demand to be allowed to charge customers for ATM use, banks have resorted to collecting other charges like account management and invoice printing fees.

Nguyen Thi Thanh Hang, deputy chair of the Card Association, said 40 commercial banks had sought to introduce fees for ATM transactions and raise them in case of ATMs belonging to other banks.

But the State Bank of Vietnam said it is not yet the right time to do either.

Trinh Thuong Thuc, a senior executive at Vietcombank, said banks need to collect ATM charges because ATM cards are not profitable.

It costs around VND400 million (US$20,500) to set up an ATM while the monthly lease is VND10 million if the machine is in a prime location and VND3-5 million in other places.

Repair and maintenance can cost VND500 million a year per machine.

The director of a joint-stock bank’s card operations said the SBV should allow banks to collect fees to offset the expenses.

“The central bank regularly asks commercial banks to report on the number of ATMs they install and number of cards they issue. This means [it] wants the banks to expand their ATM networks and card issuance,” he remarked.

His bank is seeking to expand its ATM network but the board of directors has rejected the plan because of the loss on card services.

After several failed attempts to collect ATM charges, many banks are now planning to do that in other ways. Vietcombank will collect fees for ATM invoices at VND550 per transaction. But card users can also see details of their transactions on the screen and do not have to print them out.

Since March 31 Agribank has been charging fees to print transaction details (VND550 per transaction).

Commercial banks have also been conservative in expanding their ATM networks.

According to the Card Association, only 800 new ATMs were set up in the first half.

There are now 10,516 ATMs in the country while banks had issued a cumulative 23.3 million ATM cards.

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Developers unhappy over new fees

An overview of a corner of Phu My Hung urban area. Enterprises investing in housing projects may have to pay twice – first when buying the land and second when paying use and clearance fees. — VNA/VNS Photo Kim Phuong

HA NOI — Real estate companies said planned land-use and compensation fees would eat into their profits and could even force them into liquidation.

Decree 69/CP, which becomes effective from the beginning of October, states that new land fees for real estate enterprises will be based on market prices. If the draft comes into effect unchanged, firms will be forced to pay the full market price, instead of 20 to 30 per cent as before.

Le Hoang Chau, president of the HCM City's Real Estate Association, said enterprises investing in housing projects would have to pay twice – first when buying the land from its owners and second when paying usage and clearance fees.

"This will cause land prices to soar as enterprises will have to increase the selling price of housing in order to offset their increased outlay," he said.

Lawyer Nguyen Thi Cam said the new regulation had several weakness that were detrimental to real estate firms.

She said the new decree should be modified because real estate companies would have to pay the same fees for land that had no infrastructure as that with infrastructure because market prices were based on developed land.

Nguyen Canh Ha, director of An Thien Ly Company, said his company acquired a housing project in Vinh City. He said his company had agreed to buy the land for VND4 million (US$ 210) per square metre, while selling it for VND4.5 million ($230) per square metre.

However, he said under the new regulation, his company would have to pay an additional fee of $230 per square metre for using the land. As a result, he said his firm had been forced to pull out.

Meanwhile, a representative from Binh Dan Company said his firm had invested in a 14,000-sq.m housing project in HCM City. According to the new regulation, his company would have to pay a land-use fee of around VND57 billion ($ 2.8 million), while the whole project itself was worth just VND60 billion ($3 million).

Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company, also said the new law would make it hard for companies to earn money.

He said that under the new regulation, for a 10,000-sq.m housing project, a business would have to sell out about VND51 billion ($2.6 million), which would include compensation to land owners of VND40 billion ($2.1 million), spending for public purposes such as parks of about VND8 billion ($430,000) and roads VND3 billion ($160,000). For the whole project, his company could expect to earn just VND600 million ($32,000), he said.

Le Ngoc Khoa, deputy director of the Department for Public Assets Management, said HCM City real estate firms would be hardest hit because companies typically paid very high compensation costs for agricultural land, which was however cheap in comparison to developed land. Under the new rules, they would have to pay far more to develop rural land.

Nguyen Quoc Chien, director of Pricing Division under the HCM City's Department of Finance, said relevant bodies would consider amending the new regulation if it was felt property developers were being unfairly treated. — VNS

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