'Huge profits should prompt banks to absorb RM1 ATM fee'

 

The Federation of Malaysian Consumers Associations (Fomca) has urged banks to abolish the RM1 interbank automated teller machine (ATM) withdrawal fee.

Fomca CEO Saravanan Thambirajah said that it would provide meaningful relief for millions of Malaysians, particularly low-income workers who depend heavily on cash transactions.

“The rising cost of living in Malaysia continues to affect the B40 and M40 income groups, with even small financial burdens adding up over time.”

He argued that banks, given their massive profits, should bear the cost instead of passing it on to customers.

“Financial reports for 2023 showed significant growth in net profits among Malaysia’s top four banks: Maybank saw a 17.5 percent increase to RM9.35 billion, CIMB rose by 28.3 percent to RM6.98 billion, Public Bank increased by nine percent to RM6.6 billion, and RHB Bank expanded by 4.8 percent to RM2.81 billion,” he said in a statement today.

He quoted Bank Negara Malaysia’s 2024 Payment Statistics, which showed that Malaysians use ATMs approximately twice a month.

For those relying on interbank withdrawals, he said this translates to RM24 per year, excluding individuals who use multiple banks.

Fee unfair

Saravanan highlighted the unfairness of the fee, especially for low-income earners and rural residents who frequently rely on small amounts of cash withdrawals and are often forced to use ATMs of other banks.

“For many, the fee is seen as another example of financial institutions prioritising profits over consumer welfare, especially when alternatives are not explored.”

Saravanan also noted that banks generate substantial revenues from other sources, such as interest rates, loan repayments, and service charges, making the imposition of this additional fee excessive.

He said Fomca has raised concerns about banking fees with BNM and other stakeholders.

“There needs to be greater regulatory oversight, with BNM playing a central role in ensuring fee structures are fair.” - Mkini