Are Thai banks ripping off consumers?

[buksida]

WHEN one wanders around Thailand today, so many people can be seen struggling with their loan and credit card repayments to banks. There are always complaints by expats of unreasonable bank charges on the pages of bulletin boards, whereas on travel pages there are warnings about poor Thai bank foreign exchange rates at airports.

Until the recent economic slow-down, the profitability of Thai banks had been very high, relative to banks around the rest of the region.

This prompts the questions: Are Thai bank charges high compared to other countries in the region?, If so, why are they so high?, and, Are consumers being ripped off?

The current mortgage lending rate in Thailand is 12 percent. This could be considered one of the highest in the region today when compared with 10.5 percent in the Philippines, 11 percent in Indonesia, 10.5 percent in Malaysia, and 10.99 percent in Australia.

Yet, the cost of Thai money through deposit rates paid on savings accounts is the cheapest in the region at just 0.5 percent. This compares with the Philippines which is also 0.5 percent, Indonesia, at 2 percent, Malaysia, at 2.45 percent, and Australia at 5.13 percent.

Fixed deposit (FD) rates in Thailand are also among the lowest in the region with deposit rates between 1.15-2.80 percent. FDs are not rolled over to the best rates on maturity, and thus require a request from the customer for the highest rate. This compares to the Philippines at 1.5 percent, with Malaysia offering above 4.2 percent, Indonesia 6.5 percent, and Australia 3.25 percent.

Some of the most common complaints about Thai banking charges is the 2-5 percent withdrawal fee on international credit cards. There have also been a number of complaints about an extra 150 baht (US$4.22) government charge on foreign debit/credit cards at ATMS that shows up as an extra amount withdrawn on statements.

Bank charges also occur when statements are requested (200 baht), and if any letters in regard to accounts are required by customers (200 baht), e.g., a letter to immigration stating a bank account balance for a visa. Some banks even charge a small fee for updating bank books.

Thai bank computer systems are centralized, yet Thai banks, unlike most other banks within the region, still charge for paying in money to accounts held at the bank at different branches. They are treated as bank transfers where fees start at 30 baht, and then run up to over 1,000 baht on amounts above 100,000 baht at some banks. Thai banks usually charge between 15-30 Bht for ATM withdrawals across their defined banking districts. This charge is in addition to the ATM service charge, which ranges from 10-25 baht per transaction.

A range of charges occur for commercial and credit card facilities across the spectrum of transactions. Credit card services generally carry a 20 percent p.a. interest rate, one of the highest in the region.

Other bank charges are periodically being added, like the coin counting charge of 1 percent put into effect a couple of years ago.

Thai interest rates and bank charges can be considered some of the highest in the region. Thai consumers are paying higher costs for banking services and loans, and being paid the least in interest for the money they deposit in banks.

Full Story: Asian Correspondent

[StevePIraq]

I don't know where the mortgage rate for Australia comes from as it is not 10.99% it is 4.5%

[Ratsima]

Isn't it their duty to their shareholders to make as large a profit as possible even if it means ripping off customers? They behave as if there is some sort of banking cartel. Competition, in terms of price and service level is almost non-existent. There are two ways the cost of banking might go down: regulation or competition. Neither seems likely.

[STEVE G]

Isn't it their duty to their shareholders to make as large a profit as possible even if it means ripping off customers?.

Certainly Bangkok Banks dividend rate to shareholders was higher last year than their fixed deposit rate but you would have the added risk of owning a service industry that rips off its customers!

[artyoz]

Reports of ATM charges for foreign cards gone up to 200b/withdrawal from 180b as from today!!

[Pleng]

Can confirm that I was charged 200bt for a withdrawal today at a Bangkok Bank ATM

[JimmyGreaves]

Can confirm that I was charged 200bt for a withdrawal today at a Bangkok Bank ATM

They are Bast*******!!!!!