2 March 2010
I refer to the letter from Vincent Chan entitled “Why impose hefty credit car surcharge?” (ST 2 March 2010).
I wish to quote two other examples of hefty charges by banks in Singapore:
a. Recently, I made a payment of USD 1,810 to a factory in China. The bank charge amounted to 53 USD was deducted from the payment. The factory in China, which had earlier agreed to bear the bank charge, complained that the charge was too high.
b. I received a letter from my bank stating that the administration fee for a late payment on credit card is $50. This is in addition to the interest rate of 2% per month that they charge on the rollover balance.
In both cases, the bank charges are exorbitant relative to the marginal cost of the service that is being provided.
As the banks are already making big profit from the huge interest spread, why are they allowed to make more profit from these exorbitant charges?
After a customer has opened an account, it is difficult for the customer to change to another bank. In any case, nearly all banks seem to be operating a cartel in levying hefty charges to boost their profits.
I wonder if the Monetary Authority of Singapore considers it to be their duty to regulate the banks to treat customers fairly, including the levying of reasonable charges for essential banking services?
Tan Kin Lian
Bank charges - excessive is the word
I WISH to add to Mr Tan Kin Lian's lament about excessive fee charges by banks in his letter last Thursday, 'Banks do it too'.
My company's bank statement says:
- Balance brought forward (overdrawn) $3.61
- Service charge $15
- Overdrawn interest charge $10
Now how many per cent interest is that?
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