Negotiate and cooperate to get reasonable fees for banking industry

	COVID-19 hits profitability of national banking sector
	Banks increase non-credit revenue
	A prosperous year for Vietnam’s banking industry

How do you evaluate the bank's dispatch for the reduction of fees from network operators and international card organizations?

In the economy affected by the Covid-19 pandemic, the authorities have actions, guidelines and policies as well as encouraging partners and businesses to support each other, according to the spirit of overcoming common difficulties.

Banks are also businesses; they also have to complain when there are negative effects on the business situation and profits. In fact, the bank itself has to cut business costs and cut wages to reduce interest rates, reduce support fees for corporate customers and individuals affected by Covid-19. These actions can even affect the business profits of the banking industry in 2020, so if the partners do not join hands to support the banking industry, it is unfair.

However, with cooperation among businesses, this is based on market principles, agreements and contracts through commitments, so changes must be negotiated and shared. Of course, customers have a basis if the contract contains provisions on consideration of exemption and adjustment of contracts. Therefore, the agreement is whether the two sides have goodwill cooperation or not. As with the bank proposing that domestic telecom enterprises reduce fees, banks are always a big partner, using services so it will bring great benefits. Therefore, in a competitive environment between businesses, the reasonable cooperation will help retain customers, increase engagement and long-term connection; otherwise it will affect the profits and revenue of the network operator.

In general, all of them are beneficial stories with the action of enterprises, depending on the circumstances as well as the financial capacity of enterprises. For example, with expanded banks and state-owned banks, asking for a discount is also to support customers in the context of economic difficulties because of the Covid-19 pandemic, otherwise customers will still use it. The goods still have enough potential to pay, so they can still keep high profit. Meanwhile, with small banks, subject to customer competition, the reduction of fees will be beneficial.

For international card organizations such as Visa and MasterCard, what difficulties will there be in negotiating?

With international organizations, on the basis of negotiation and sharing, these organizations may voluntarily reduce fees or not. Regulatory authorities cannot interfere or put pressure on these organizations to reduce fees. Because these organizations are almost of a "monopoly" type, not subject to the competition from domestic telecommunications enterprises, they agree to reduce or not, even if they raise fees, banks and customers suffer. In the context of a market economy;the enterprises increase or reduce their fees, for good reasons.

Of course, these international organizations will still have a view on the willingness to cooperate when they realize that customers have real difficulties or based on "reciprocal" agreements. Therefore, Visa recently expressed the view that it will consider reducing fees in its long-term strategy. This is true when all businesses are involved in the long-term plan. In the short term, it is possible that these organizations still see the growth of the Vietnamese banking system, or if only a small reduction is still required, and there is no reason to immediately reduce fees as proposed.

From the issues mentioned above, which actions should authorities take?

As I said above, except for some state unit prices, the currency owned by state regulations is clearly specified, how to reduce and under what conditions, standards and procedures, as well as types of charges and fees left which belong to the market principles, set by enterprises according to commitments and agreements have the right to stay the same or change under negotiations or contracts. The governing body must not interfere in such completely marketable matters. Regulatory agencies should only exchange, share and encourage with partners to help banks express their goodwill and facilitate changes of agreements.