Jelutong Member of Parliament R.S.N. Rayer has joined a chorus of individuals and organisations who are supporting the campaign to abolish the RM1 interbank ATM withdrawal fee.
The campaign by the National Union of Bank Employees (NUBE) has merits because commercial banks are all showing steady profits despite the wobbly economic conditions, said Rayer.
So, the banks can afford to drop the requirement for a RM1 interbank fees for withdrawing from an ATM different from one's own bank branch, said Rayer in an interview.
He added that in today's age where the average person is struggling due to the inflated costs of living, any savings should be supported by the relevant authorities.
Rayer has called on Bank Negara Malaysia (BNM) to support the proposal to abolish the interbank ATM fee.
Earlier, NUBE Secretary General J. Solomon said there seems to be no end to the call to abolish the RM1.00 transaction fee for out-of-network Automated Teller Machines (ATM) withdrawals as medium to low-income Malaysians continue to face the quandary of higher costs of living.
He explained that Payments Network Malaysia Sdn Bhd (PayNet) is the national payments network and shared central infrastructure for Malaysia’s financial markets. BNM is PayNet’s single largest shareholder, with eleven Malaysian’s financial institutions namely, Malayan Banking Berhad, RHB Bank Berhad, Public Bank Berhad, CIMB Bank Berhad, AmBank (M) Berhad, Hong Leong Bank Berhad, Affin Bank Berhad, Alliance Bank Malaysia Berhad, Bank Islam Malaysia Berhad, Bank Muamalat Malaysia Berhad and Bank Kerjasama Rakyat Malaysia Berhad, as joint shareholders, as cited on the company’s website. PayNet is the company that imposes an RM1.00 fee for out-of-network ATM withdrawals.
In a recent statement (https://nube.org.my/singlepost/7853) by NUBE, the union cited that based on information obtained from the Companies Commission of Malaysia showed that as of Oct 3, 2024, Bank Negara held 26,895,534 shares in PayNet while the 11 commercial banks owned 4,434,558 shares each (. Percentage wise, the central bank’s stake of 35.5% is six times that of the average commercial bank, which owns 5.86% of PayNet.
Solomon added in the same statement that: “PayNet declared a revenue of RM544 million and net profit of RM271 million for 2023 from the RM1 withdrawal fee. Accumulated profit, amortized over the company’s six-year history, stands at 1.43 billion ringgit against an asset size of 2.1 billion.”
In theory, the numbers add to the already healthy bottom line of the Malaysian banking industry, with the 11 commercial banks owning PayNet declaring net profit running into the hundreds of millions — in some cases, billions — for 2023.
In Bank Negara’s case, its 35.5% stake in PayNet would have delivered a net profit of RM96.2 million for 2023.
During an interview (https://international.astroawani.com/videos/awani-review-cynthia-x7ko8u/awani-review-paynet-driving-malaysias-cashless-digital-future-x94j5v2) with Astro Awani on Aug 24 last year, PayNet Group CEO Farhan Ahmad, said: “In 2023, (PayNet) processed RM5.15 trillion in transactions—3.3 times Malaysia’s Real GDP.”
“These profits were made on the backs of the majority who form Malaysia’s poor working class,” Solomom said, adding, how could BNM, as the nation’s central bank, be the largest shareholder of PayNet along with 11 other banks as joint shareholders. “This is a form of exploitation of the poor working class, where the disadvantaged remain trapped in poverty while the wealthy continue to profit.”
It is important to note that on April 6, 2020, the Malaysian Government waived the fee for cash withdrawals under the Malaysian Electronic Payment System Sdn Bhd (MEPS) system to ease the public's access to cash without paying the RM1 fee. However, this exemption was terminated on February 1, 2022, and the RM1 fee was reinstated by the banks.
The National Union of Bank Employees (NUBE) recently called on the government to instruct BNM and other banks to stop this fee.
The RM1 interbank withdrawal fee charged by PayNet, though seemingly small, can be seen as burdensome and unfair, especially for low-income workers and those who rely heavily on frequent banking transactions for their livelihoods. The call was made specifically on PayNet to discontinue with immediate effect the RM1 out-of-network ATM fee imposed by the financial institutions on any individuals withdrawing from an ATM machine different from the ATM card issuing bank.
"Millions of people in Malaysia have bank accounts, and it is estimated that 80 per cent of them belong to the B40 and M40 groups. This means millions of people are affected by the RM1 fee. "This fee only makes the rich richer, while the poor continue to struggle. In today's high cost of living, even RM1 places a burden on them," Soloman said.
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