MANILA, Philippines—Reader Ray Vincent wrote to complain about what he called “sneaky and cruel P200 penalty for ATM accounts.”
Vincent said many people were probably not aware that “local banks charge P200 every time an ATM card’s balance drops below P2,000.” He said the stiff penalty was particularly hard on modest bank depositors who could not afford to maintain a minimum balance of P2,000.
We forwarded the e-mail to the Bangko Sentral ng Pilipinas and got this response from Elvira E. Ditching-Lorico, acting deputy director and head of financial consumer affairs group, central supervisory support subsector.
She said “an informal survey of nine local universal, commercial, thrift and rural banks showed that: (i) the minimum monthly average daily balance (MADB) requirement on ATM accounts varies from P500-P10,000; and (ii) the service charge for falling below the minimum MADB requirement ranges from P50-P300 depending on the type of deposit accounts.”
Lorico said the imposition of penalty on accounts falling below the required MADB was a business decision of banks. The BSP, she said, recognized this as a prerogative of banks provided clients were properly and adequately informed of such policies.
The charges, she added, were aimed at recovering handling, processing and administrative costs of servicing accounts and discouraging or preventing inadvertent closure of accounts through over-withdrawal.
The BSP official said the policy was meant to encourage clients to maintain higher deposit levels, thus increasing their savings awareness, as they tried to avoid penalty charges.
Lorico said it was the BSP’s view that “controlling bank charges or fees may impede the banks’ incentive to improve service and undertake further innovation for customers’ benefit. Banks are required, however, to fully disclose such charges to their clients. This disclosure helps the public make an informed choice in dealing or transacting with banks.”
What this means is, just as a buyer often compares prices before making a purchase, then people planning to open new accounts should find out first what a bank’s terms and conditions are. As Lorico said, banks did not impose the same fees and different kinds of accounts would be subject to different rules.
People should choose a bank because it offers products that suit their needs and because it gives the kind of service they want and are comfortable with.
The most prominent names in the industry may not necessarily meet a prospective client’s specific requirements. People should find out the differences among universal, commercial, thrift and rural banks and be guided by them in choosing where to keep their money.
Dollar charges
Lorico also responded to queries about dollar charges banks impose for the use of their automated teller machines. Some depositors of Philippine Savings Bank (PSBank) expressed concern that their banks were charging them the equivalent of US$3.50 for withdrawals and US$1 for simple balance inquiries when they use ATMs that have Cirrus connection or facility.
The BSP official said Jay Velasco, PSBank vice president, Centralized Branch Operations and Support Division, explained that the charges were imposed only when a bank client used the ATM Cirrus card abroad. Use of the card locally was free of charge.
Foreign-issued Cirrus ATM cards used in PSBank machines would be charged fees by the bank that issued them, not by the local bank.
Lorico said, “To assist consumers in choosing which of the banks charge the least amount for ATM transactions or render such services for free, a ‘Comparative List of ATM Charges of Banks to Cardholders of Other Banks’ is made accessible at the BSP website www. bsp.gov.ph/ banking/servicefee. htm.”
Send letters to The Consumer, Lifestyle Section, Philippine Daily Inquirer, 1098 Chino Roces Ave. cor. Mascardo and Yague Sts., 1204 Makati City; fax 897-4793/94 or e-mail lbolido@inquirer.com.ph.
