One of Thailand’s biggest banks wants the country’s central bank to impose a fee for over-the-counter branch transactions in a push to move the country toward electronic payments.
Krung Thai Bank Ltd., Thailand’s second largest bank by assets, plans to ask the Bank of Thailand to set a fee for in-branch cash withdrawals that exceed 100,000 baht (US$3,257 or 2,460 euros), a spokesperson tells PaymentsSource.
The bank decided to pursue the fee after it conducted a review of payment systems and found that switching to electronic payments from the costly traditional over-the-counter method is needed to reduce expenses, he adds.
“The over-the-counter method is just too costly, and the bank will propose the systemic switch to authorities to reduce operating costs,” the spokesperson says.
Though cash withdrawals of 100,000 baht only represent 1% of the system's total clients, they represent 70% of the cash that circulates through the system, he says. As such, it adds to the cash handling costs at the bank’s locations.
The spokesperson points out that the fee would help reducing the cash flow through the country’s banking channels, according to him. “The fee could be in line with the amount or be fixed as well.”
The central bank could then pool these fees in a fund to install electronic data systems that would help the country to migrate to a cash-based society, Krung Thai contends.
“Thailand has around 280,000 of electronic data systems and if they could be increased to 1 million, it would reduce cash usage,” he says.
Krung Thai Bank issues 11.5 million debit cards and wants to grow its card base by more than 500,000 cards by yearend.
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