Taiwan banks reluctant to charge 'account keeping fee'

Some foreign banks, including Standard Chartered Bank and HSBC (Hong Kong and Shanghai Banking), have started charging a monthly fee from clients with less than NT$10,000 of deposits in their accounts.

An executive at Standard Chartered said the move is intended to prompt customers with several accounts to consolidate their funds for more efficient use of the capital.

Major banks like Chinatrust Commercial Bank, Taipei Fubon Bank, Taishin Bank, and all government-owned banks do not charge such fee.

But Chinatrust Commercial Bank said it does not make any interest payments to customers when the amounts in their time deposits fall below NT$10,000.

Gong Tien-shin, president of Fubon Financial Holding, said banks certainly welcome the move of charging “deposits account keeping fee” from customers in order to reflect operating costs.

He said banks have already waived many service charges due to intensified competition.

For example, the fund transfer fee for using the automated teller machines (ATMs) does not reflect the actual costs, he said.

Tsai Fu-ji, vice president of Bank of Taiwan, said his bank and other state-run financial institutions do not collect the “deposits account keeping fee” from customers at present.

He said banks are not prohibited from charging such a fee by existing regulations.

But he cautioned that charging such a fee would create a negative impression from the public and further aggravate the financial pressure on those depending on income from interest earnings.

The move of collecting the fee needs to be discussed and approved by the bankers association, he said.

The talk about the possibility that Taiwan banks may charge a “deposits account keeping fee” from customers has caused concern from legislators.

In response, Sean Chen, chairman of the Cabinet-level Finance Supervisory Commission, urged local bankers to take a more cautious attitude toward the issue.

From the legal point of view, it is not totally without defects for banks to collect “account keeping fees,” Chen said.

But he also said that bankers should be fully aware that they could face criticisms from the public.

Concerning the move taken by the government's Chunghwa Post Company to stop accepting deposits from corporations, Chen said he will exchange views with the Ministry of Transportation and Communications which supervises operations of the postal banking system.

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