BANK FEES IN INTERNATIONAL PAYMENT IN VIETNAM
I. Situation of international payment in Vietnam:
1) General:
International trade credit and the documents associated with it are more
complicated than their domestic equivalents. This is because international trade
cuts across two bodies of laws and regulations and because the buyers and sellers
(importers and exporters) are less familiar with and less accessible to one another
than buyers and sellers in the same country. These complications often require the
help of banks to intermediate import-export transactions through methods of
international payment.
International payments are partly deregulated in Vietnam. The receipt of funds
remitted from foreign countries has been liberalized, but remittances to foreign
counties are strictly controlled, requiring many documents as evidence of reasons
for such offshore payments. Payment and receipt of funds for capital accounts are
usually prohibited, and require government authorization.
International payments are usually subject to the same methods as used in other
countries. Individual commercial banks have correspondence agreements with
overseas banks and access to SWIFT (Society for Worldwide Interbank Financial
Telecommunications). They implement electronic banking and manage online
their overseas deposit accounts due from foreign correspondence banks. They also
said that they offer electronic banking services for dong accounts.
2) International payment methods:
- Cash in advance: the seller receives cash from the buyer prior to shipment.
- Documentary credit/ Letter of Credit: an instrument issued by the buyers bank
(issuing bank) to guarantee to pay a specified amount of money to the seller on
presentation of specified documents, before a certain date and according to the
International Chamber of Commerce rules.
The Collection: the goods are shipped to the buyer. The sellers draft and
documents covering the shipment are presented through the buyers bank for
payment.
Open-account: in open-account trade, the buyer and seller are well-known to each
other and probably have established a successful working relationship. The buyer
orders goods and promptly pays for them when the goods and titles thereto are
received.
The banks charge all the fees for various services that they provide in international
payment. Bank fees generally constitute a major portion of revenue for the banks.
II. The reasons for choosing VIB to do research:
1) About VIB
Vietnam International Commercial Joint Stock Bank, abbreviated as Vietnam
International Bank (VIB), was founded on 18th September 1996, with its head
office based at 16 Phan Chu Trinh, HoanKiem District, Hanoi.
By 20th October 2011, after 15 years of operation, VIB has become one of the
leading commercial joint stock banks in Vietnam, with total assets of more than
VND 100,000 billion. The banks charter capital is now VND 4,250 billion while
its shareholders equity is more than VND 8,200 billion. Currently, the bank has
4,300 people working at nearly 160 branches and transaction offices in 27 key
provinces/ cities across the country.
2) Reasons for choosing VIB
- During its operation, VIB has won a range of titles and awards from prestigious
organizations nationally and internationally, including
+ "Strong Brand of Vietnam"
+ "Bank with The Most Satisfying Retailing Services"
+ 8 times in a row won "Bank Made Excellent International Payment Operations"
(by Citigroup)
+ The Best Issuing Bank in Asia Pacific in 2012 (by International Finance
Corporation)
+ Ranked the 3rd among 500 biggest private enterprises in Vietnam in terms of
revenue as voted by VietnamNet...
-
Being one of the pioneers in reforming business activities, VIB always takes its
customers as the focus and its service quality and innovative solutions as the
business motto, with the determination to "become the most innovative and
customer-centric bank in Vietnam". Since its foundation, one of the missions
defined by the banks leaders is to be excellent in providing innovative solutions
to satisfy customers maximum needs. Therefore, VIB has been enhancing its
efficiency in the use of capital and management capacity and continuing to focus
on the development of retail banking networks and new products through
diversifying distribution channels in order to provide financial solution packages
to focused customer groups, and simultaneously improving the service quality to
increasingly better serve customers.
For the reasons mentioned above, we decided to choose VIB to study their
International Payment services and transaction fee levels as well.
III. Some international payment services provided by VIB and their fee level:
Services
Fee levels (excluding VAT)
Withdrawal/Cash advance (individual customers)
2
.
1.1 For international credit card
4% of transaction amount,
1.2 For international prepaid card
Account statement via SWIFT
min 60,000 VND
3% of transaction amount
50,000 VND/request + 5 USD
cable fee
Investigation of oversea transactions
5 USD/txn + cable fee + actual
fee paid to foreign banks
Oversea remittance
.
4.1 For individual customers
a. Outward remittance
International outward remittance
Investigation/Amendment/Cancellation
0.2% (min 10 USD, max 300
USD)
10 USD/request + actual arising
fee (foreign banks collect)
b.
Inward remittance
International inward remittance
Investigation (at beneficiaries request)
Refund remittance order
4.2 For business customer
a Outward remittance
Outward remittance in convertible
foreign currency
Investigation/Amendment/Cancellation
of remittance order at remitters request
b Inward remittance
0.05% (min 2 USD, max 200
USD)
10 USD/request + actual fee
payable to foreign banks, if any
20 USD/request
0.2% (min 10 USD, max 200
USD) + cable fee
10 USD/request + actual fee
payable to foreign banks, if any
.
Inward remittance to the account at VIB
Investigation/Amendment
Free
10 USD/request + cable fee
Receive and handle international
0.2% cheque value, min 5 USD
.
6
commercial cheque colletions
Cheque encashment of international
5 USD
.
7
commercial cheque collections
Investigation/Cancellation of
Actual fee (min 5 USD) + cable
international commercial cheque
fee, if any
collections
Documentary Letter of credit (L/C)
.
8.1 Import L/C
a. L/C opening
100% cash over
0.05% L/C value (min 50 USD,
max 500 USD) + cable fee
Less than 100% cash over
+ Cash over amount
+ Non-cash over amount
0.05% cash over amount
0.05%/month/LC value (min 50
USD) + cable fee
b.
L/C amendment
Amendment to increase L/C amount
As L/C opening fee on increase
amount (min 30 USD) + cable
Amendment to extend L/C validity
fee
As L/C opening fee on actual
number of extended days (min 30
c.
Other amendments
L/C payment
USD) + cable fee
20 USD
0.15% value of the draft (min 20
USD)
d.
e.
Acceptance payment of usance draft
Cash cover amount
Non-cash cover amount
Cancel L/C at Applicants request
30 USD/set
0.1%/month (min 30 USD)
20 USD + foreign banks fee, if
any
f.
Endorse Bill of lading
Shipping document set receipt by the
10 USD
Bank
Shipping document set receipt by the
g.
h.
15 USD
Applicant
Shipping guarantee issuance
0.15%/month/LC value (min 50
Consultancy fee on L/C opening or
USD)
Negotiable
commercial contract
8.2 Export L/C
a. L/C advising
20 USD
b.
c.
d.
L/C advising amendment
Cancel L/C at customers request
Payment for document set of L/C
10 USD/time
20 USD
0.15% document set value
e.
f.
g.
Handle and check export L/C document set
Sending export document set
Tracing/Amendment/Adjustment of letter
(min 20 USD, max 200 USD)
20 USD-50 USD/set
Actual cost payable
10 USD/time
h.
demanding payment at customers request
Prepare document set at customers request
0.1%/ commercial invoice
Transferable export L/C
(min 20 USD, max 200 USD)
0.1% L/C value
i.
(min 50 USD, max 500 USD)
8.3 L/C confirmation
a. L/C confirmation
b. Confirmation of L/C amendment
Amendment to increase L/C amount
Amendment to extend L/C validity
Other amendment
8.4 Negotiation fee for export documents
Negotiation fee for export L/C document
Negotiable
As confirmation fee charged on
increased amount
As confirmation fee charged on
number of extended days
20 USD/set
0.2% bill value
(min 20 USD, max 200 USD)
Collection
.
9.1 Import collection
a. Collection notice, Collection amendment
b.
c.
notice
Receive and handle documentary collection
D/P document set
D/A document set
Documentary collection payment
d. Endorse Bill of lading
9.2 Export collection
10 USD/time
10 USD/set
20 USD/set
0.2% value (min 20 USD, max
200 USD) + cable fee
20 USD/time
a.
b.
Receive and handle documentary collection 10 USD/time + postage fee
Tracing/Amendment/Cancellation/Recovery 10 USD/time + actual payable
c.
d.
of collection at payees request
Collection payment
Negotiation of documentary collection
cost (if any)
Actual payable cost
0.2% draft value
(min 20 USD, max 200 USD)
The outstanding benefits of having bank fees in VIB:
-
Inward and outward international transfers are a safe, convenient and costeffective way of moving money and doing electronic payments to people in other
countries.
It is a secure method, as transactions are authenticated and funds are transferred
directly between banks.
Ideal for all payments for goods and services, gifts, investing abroad and travel but
requires full account details of the beneficiary.
It takes around two working days to send and receive money.
A lot of transactions are not paid, for free.
IV, Bank fees in other Vietnamese banks in International payment:
Look at several other banks fee levels to have a better understanding about International
payment transactions fee in Vietnam.
1. Eximbank:
1.1 For Corporates, International settlements fee schedule:
Items
Fee rate
I.
EXPORT
1.
Receiving inward transfer from foreign banks
1.1
Inward transfer-Overseas
0.05% (min USD2, max
USD100)
1.2
Refund of remittance order to
USD10
foreign bank
2.
Collection
2.1
Sending documents overseas for
USD3
collection
2.2
Settlement for trade collection
0.135% /value of set of documents
(min USD10, max USD150)
2.3
Investigation of collection
documents
3.
Export L/Cs
3.1
Advising L/Cs
USD5/time
Directly to customers
USD15/LC
3.2
L/C transfer and amendment
a.
Domestic transfer
USD20
b.
Overseas transfer
USD30
3.4
Cancellation of L/C as per request
USD10
II.
IMPORT
1.
Outward overseas remittance
1.1
Telegraphic remittance
a.
Remittance fee
0.2%-5% (min USD5)
b.
Amendment, investigation,
As agreed (min USD10)
cancellation of remittance orders
(excluding telegraphic fee)
1.2
Remittance via Bankdrafts
a.
Bankdraft issuance
+ Supply of Bankdrafts
+ Service fee
b.
2.
Cancellation of Bankdrafts
Free
Minimum 0.20% (min USD5)
As agreed (min USD10/bankdraft)
Collection
2.1
Receiving and advising collection
2.2
Settlement for trade collection
USD5
a.
In case fee is incurred by the buyer
Minimum 0.15%/ payment amount
(min USD10)
b.
In case fee is incurred by the seller
Minimum 0.2% / payment amount
(min USD20)
3.
Import L/Cs
3.1
L/C issuance
a.
100% deposit
Minimum 0.075% / LC value (min
USD20)
b.
Below 100% deposit
USD20
+ Deposited amount
Minimum 0.075%/ deposited
amount
+ Non-deposited amount
Minimum 0.15%/ non-deposited
amount
3.2
Cancellation of L/C as per request
USD20+ fee charged by foreign
banks (if any)
4.
B/L endorsement for receipt of
goods
5.
4.1
In case fee is incurred by the buyer
USD5/B/L
4.2
In case fee is incurred by the seller
USD20/B/L
Issuing letters of guarantee for
USD50/B/L
receipt of goods
1.2. With Individuals, overseas payment fee schedule:
Items
1.
Fee Rate
Inward overseas remittance
1.1
Receiving inward remittance
0.05% (min USD2, max USD100)
from overseas
1.2
Fee applicable to returning of
USD20
payment orders to foreign
banks
2.
Overseas outward remittance (by wire transfer or bank drafts
2.1
For overseas study purpose
0.15 % (min USD5, max USD150)
2.2
For other purposes
0.20% (min USD5)
2.3
Issuing bank drafts for
0.10% (min USD3)
overseas study purpose
2.4
3.
Bank draft cancellation
USD15/bank draft
Investigation of payment
USD5
orders
2. Ocean Bank: (Fees and charges do not include VAT)
Services
Fee rate
OVERSEAS REMITTANCE
I.
1
Outward remittance
1.1 Electronic Transfer
0.2 % transaction value
1.2 Bank drafts transfer
0.1 % (min USD5, max
1.3 Amendment, Investigation
USD10USD200)
+ actual fee charged by
1.4 Cancellation
2 Inward Remittance
bank
USD10 +foreign
actual fee
charged by
foreign bank
2.1 Charges paid by beneficiary
Free
USD15
2.2 Charges paid by ordering bank
Cash withdrawal
2.3 a. In VND
b. In Foreign currency
II
DOCUMENTARY COLLECTION
Export documentary collection
As per current Domestic Fees and
Charges
USD10
1.1 Handling documents for collection
1.2 Collection Settlement
0.2 % document value (min USD10,
max USD200)
USD5
1.3 Collection Amendment
2 Import documentary collection
USD10
2.1 Advising documentary collection
2.2 Collection Settlement
0.2 % document value (min USD10,
max USD200)
USD5
2.3 Collection Amendment
3
Cancellation as per customers request
Collection returned unpaid
Forward the collection document to other
USD10 + actual foreign
Actual fee banks charge
55.1 Domestic bank
USD5 + actual postage
USD15 +charge
actual postage
5.2 Overseas bank
Collection Investigation
6
charge
6.1 Domestic Investigation
USD5
6.2 Overseas Investigation
USD10
III
1
LETTER OF CREDIT (L/C)
Import letter of credit
Issuing L/C
1.1 a. 100% Cash covered L/C
0.05 % L/C value (min USD20,
max USD500)
b. L/C with Cash cover of zero / less than
100%/ other collateral
Amendment of increasing value and/or
1.2 extension L/C validity (other attached
2
USD20
As per L/C issuing fees
amendments not charged)
Export Letter of Credit
2.1 Advising L/C
U
As per
Ocean Banks stipulation
SD20
2.2 Confirming L/C
from time to time (min USD50)
Confirming L/C amendment
2.3 a. Amendment of Increasing L/C
b. amount
b. Other amendments
As per L/C confirmation fee
USD10
Advising L/C amendment without
2.4
2.5
Document Settlement
USD10
0.15% document value
(min USD20, max USD200)
2.6
Document Negotiation
As per agreement
As per Ocean Banks stipulation
2.7
Transferring L/C
(min USD50, max USD 500)
2.8
Examination of the Export documents
2.9
L/C cancellation upon request
Free of charge
USD20
V. Some problems our group met while doing this assignment
1. There is not much detailed information about International payment services and the
fee level for them as well. This is because some banks do not public all the information
about their services fee.
2. As our knowledge about International payment is still limited, we sometimes cannot
differentiate and deeply understand some methods. This made it hard and slowed our
work down also.
3. The differences in the way banks classify services and build their fee schedules made it
difficult for us to make a clear and detailed comparison between VIBs fee levels and
other banks.
