In the first three quarters of this year, inward foreign exchange transactions of banks recorded US$14.179 billion, equal to 1.8% up on the same period last year and total outward forex revenue booked at US$13.92 billion, exceeding the 2004 amount by 6.7%, according to figures released by the State Bank of Vietnam.
The strong increase in trading foreign currencies is partially due to the ongoing growth of overseas remittances sent back to the country, said the SBV.
Commercial banks are stepping up efforts to tap more revenue from remittances this year.
Vietnam now has 58 banks and 43 businesses conducting the overseas remittance delivery or transfer services.
Commercial banks all take advantage of their wide branch network to create competitive advantages for this task.
Pham Van Tan, chair of Eastern Asia Bank’s Monetary Transfer Co said that with the wide network of EAB, its customers could receive enough remittances sent home by their overseas relatives within just 24 hours. Currently, EAB has 200 staff who are tasked to bring remittances to customers’ house, creating more conveniences and quickly satisfy the demand of customers.
Tan disclosed that total remittance payment revenues of the EAB Monetary Transfer Co take top position with an estimated US$513 million in January-September period and the company set a target to reach US$690 million by the end of this year.
Mac Huu Danh, vice general director of Saigon Thuong Commercial Joint Stock Bank (Sacombank) said that Sacombank’s staff force delivering overseas remittances to customers has already stretched nationwide. It takes customers just 10 minutes at earliest to receive remittances via the Western Union channel and one day via other foreign monetary transfer channels.
According to the SBV’s HCM City Branch, in the first nine-months this year, overseas remittances sent home to HCM City via the banking system were estimated at US$1.65 billion. In the third quarter alone, HCM City received up to US$500 million of overseas remittances. The central bank’s HCM City branch forecast that overseas remittances sent back to HCM City would continually increase in the last months this year. 90% of customers received US dollar-based remittances, the remaining ten percentages of customers received dong, CAD, AUD, euro and some other currencies. Therefore, in order to meet all foreign payment currency sources in the local market, banks also had to “import” US dollars to serve overseas remittance payments.
It was reported that EAB has to import average US$7.5-8 million each year to pay overseas remittances.
Danh said that banks’ attracting overseas remittances this year would be much higher than last year because many more Overseas Vietnamese or Viet Kieu have acknowledged the open guideline of the government, so they are increasing the amount of remittances to invest in or assist their family’s economy. Furthermore, beneficiaries of remittances are not subject to personal income tax and they could receive remittances in US dollar from their overseas relatives.
Currently, many local banks including Vietnam International Bank, Asia Commercial Bank, Mekong Delta Housing Development Bank, the state-run Incombank and some other banks are closely working the global monetary transfer firm Western Union to develop their home delivery services.
Particularly, as of October 11, ACB will bring overseas remittances to its customers’ doors in all 64 cities and provinces without extra fees via the Western Union channel.
Nguyen Thanh Toai, deputy director of ACB said that with the professional staff force of the ACB Guard Service Co, customers will be ensured to receive enough remittances within 24 hours.
VIBank is currently using three channels to transfer overseas remittances comprising Western Union, Xoom and Travelex with simple procedures and grant free-of-charge for dong-based remittances. For customers whose accounts are opened at the bank, VIBank will automatically include remittances into the accounts of customers after the money are transferred home via the bank by their overseas relatives. Beneficiaries could withdraw cash from their accounts at any time.
Beside quick monetary transfer services, banks also are launching “tactics” to woo customers such as, EAB granted gifts for senders and receivers of remittances on Lunar New Year (Tet) Holiday, opened many prize-based lottery programmes for senders and receivers and reduced charges for customers who sent big amounts of money home via the bank.
In order to create conveniences in competition for foreign partners, Sacombank also is reducing fees for some partners and indirectly reducing charges for overseas senders. In near future, Sacombank will promote to set up a remittance company with the aim at better serving customers and expanding the potential markets in every part of the world, especially in the places where Viet Kieu are residing.