Currency shops overcharge for lucky money
Currency shops overcharge for lucky money
Currency changers are taking advantage of the Tet occasion to charge exorbitant fees for crisp, newly minted notes, despite the State Bank of Viet Nam (SBV)'s warning that it is a violation of law, Tuoi Tre newspaper reported.
The money changers are enjoying a brisk business as consumers rush to exchange banknotes online and at shops for the holiday. The most wanted notes are newly minted bills of VND500 to VND50,000.
The fees to exchange such bills are 12 per cent, 10 per cent and 8 per cent of the total value.
The smaller the denomination, the higher the commission.
Fees are higher if the note has a "nice series number", the newspaper reports.
Thanh, an online currency changer, said people change new banknotes not only to use as "lucky money" for Tet but also for donations to pagodas, and for "money trees", which are made of new small notes.
Money changer Vo Minh Tu in Tan Phu District is offering several "money trees" of many different s for sale. One tree, which has many folded VND10,000 "flowers and leaves" sells for VND690,000 each.
Tu said many well-off customers had ordered "money trees in USD" as a gift or an ornamental tree for Tet for VND2.5 million each.
If customers bring their own notes for the tree, they will be charged VND300,000-600,000, depending on the design they choose.
Online searches for "lucky money" reveal many online sources advertising the notes on the internet.
The website "doi tien li xi moi" (exchange new lucky money), for example, shows images of 10,000, 20,000 and 50,000 dong notes. The customers then request the amount of money they want to exchange and are then quoted a fee ranging from 5 to 12 per cent.
One customer, Trang, from Phu Nhuan District said a website had quoted fees of 12 per cent for notes worth VND1 million and 11 per cent for notes worth VND2 million. Trang said she paid a 9.5 per cent fee for notes worth VND5 million and 9 per cent for notes worth VND10 million.
Another website "Doi tien li xi Tet 2015" (exchange lucky money 2015) offers a lower fee of 6 per cent, but the customers have to exchange at least 100 notes.
Le Thi Thanh Hang, deputy director of the SBV's HCM City branch, admitted that people's demand for exchanging new notes to use as "lucky money" was legitimate, but said that it was not an essential task of the bank system.
HCM City has a fairly large supply of new notes but the amount is limited; as a result, not all customers will be able to change money.
Hang added that the highest demand for lucky money were notes worth VND20,000 and VND10,000.
However, after Tet, customers will return these small notes in exchange for larger denomination notes.
"Banks are under pressure to meet demand because the customers don't want to use these small notes on normal days, but only for the end of the lunar year," Hang said.
For Tet, people also buy US$1 and $2 notes to use as lucky money despite being charged exorbitant fees. Fees can be as high as VND28,000 for one dollar.
For a $2 note, VND50,000-55,000 is usually charged. Notes issued in 1976, 1963 and 1953 sell for up to millions of dong.
Besides dollars, Uganda's 1,000 note shillings and Nepal's 50 note rupees, which have images of goats, are sought the most.
Currently, a 1,000 shilling note sells for VND40,000, six times higher than the real value, while a 50 rupee note sells for VND70,000 instead of the real value of VND10,400.
Violators
The central bank has said demand for newly minted small denomination notes is too high, and will have a negative effect on circulation of money.
SBV has asked the Ministry of Industry and Trade and Ministry of Police to work together to identify and fine violators, including individuals and organisations. SBV has asked bank officers to remain uninvolved.
Hang pointed out that if businesses and customers hoarded new notes in the pre-Tet period and exchange notes near the end of the lunar year, the bank would not be able to manage the situation.
SBV said this was a form of speculation and added that "money trees" were a violation of law as the notes are being used for wrong purposes.
