The MADANI government should prioritise consumer welfare in the call for the abolishment of the RM1 ATM interbank withdrawal fee, said Federation of Malaysian Consumers Associations (FOMCA) Chief Executive Officer Dr. Saravanan Thambirajah in a statement.
“The government must engage with Bank Negara Malaysia (BNM), Payments Network Malaysia Sdn Bhd (PayNet), and the 11 participating banks to reassess the necessity of this fee, especially given the reported huge profits earned,” he said.
In a recent statement, the National Union of Bank Employees (NUBE) highlighted data from the Companies Commission of Malaysia, revealing that as of October 3, 2024, Bank Negara Malaysia (BNM) held 26,895,534 shares in PayNet. Meanwhile, the 11 commercial banks each owned 4,434,558 shares. This means that BNM’s 35.5% stake is six times larger than the average commercial bank’s holding of 5.86%.
Additionally, NUBE cited PayNet’s financial performance for 2023, which showed a revenue of RM544 million and a net profit of RM271 million, primarily generated from its RM1 withdrawal fee. Over its six-year history, PayNet has accumulated a total profit of RM1.43 billion, with an asset base of RM2.1 billion, the statement read.
“These figures contribute to the already strong financial performance of the Malaysian banking sector. The 11 commercial banks, which each own a stake in PayNet, reported net profits running into the hundreds of millions, and in some cases, billions, for 2023. For BNM, its 35.5% share in PayNet would have resulted in an estimated net profit of RM96.2 million for the year,” expressed NUBE.
Saravanan added the government should also mandate transparency in how profits from this fee are utilised, ensuring that they are reinvested to enhance financial services, particularly in underserved areas. To take this further, the government should consider subsidising the charge or the banks should absorb the cost of interbank transactions through government support to ease the burden on consumers, especially the masses from the B40 and M40 groups.
“The RM1 interbank ATM fee disproportionately impacts the B40 and M40 income groups, who already face financial challenges due to the rising cost of living. This fee is regressive in nature, as it constitutes a higher proportion of income for lower earners.
“Eliminating this fee would provide significant relief to these groups and align with the government's commitment to ensuring financial inclusivity and social equity,” he added.
Saravanan highlighted key reasons as to why the fee should be abolished completely is the problem of accessibility where the banks must ensure that cash withdrawals from ATMs are made closer to consumers which can reduce transportation costs And, for profit accountability — given PayNet’s huge profits earned — the fee appears unnecessary and exploitative.
He called on the government to keep its MADANI values in alignment. “The government must act in line with its vision of fairness, inclusivity, and the reduction of economic disparities in the interest of the people.”
Saravanan added, as a central bank, BNM's primary role is to regulate financial stability, not to profit from consumer transactions. The fact that BNM is a major shareholder in PayNet raises questions about its dual role as regulator and business operator. “A clear separation of these roles is essential to avoid conflicts of interest and ensure that consumer welfare remains the priority.”
“The monopolistic structure of the ATM network, managed by BNM and PayNet, raises valid concerns. While monopolies can be efficient, they must not exploit consumers. The government should evaluate if the current system aligns with the public interest and explore policies that encourage competition or regulate fee structures to prevent undue financial strain on consumers.”
The abolishment of the RM1 interbank ATM fee would significantly benefit the B40 and M40 groups. It is imperative that BNM and PayNet reevaluate the necessity of this fee and the broader socio-economic impact. Additionally, the government should ensure regulatory oversight to prevent monopolistic practices from burdening consumers further.
All Malaysians are called upon to support the cause launched by NUBE recently by signing the petition to call for the fee to be abolished via its website at https://www.nube.org.my/hapus_caj_rm_one, and at Change.Org at https://www.change.org/p/hapuscajrm1-abolish-the-unjust-rm1-atm-interbank-fee-for-all-malaysians.
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