
Lately there has been renewed debate about the RM1 fee for interbank ATM withdrawals in Malaysia.
While some argue that this a necessary charge for maintaining infrastructure, others view it as an outdated and burdensome fee in today’s digital economy.
Hence, it is timely to revisit this policy by questioning whether imposing the fee aligns with the needs of the rakyat and the principles of fairness in financial services.
The most glaring issue with the RM1 fee is its disproportionate impact on those in lower-income groups and rural areas. For many Malaysians, especially those living away from urban centres, accessing an ATM from their own bank is a logistical challenge.
This means they are often left with no choice but to use interbank ATMs, thus incurring additional costs for basic financial access. In a nation striving for financial inclusion, such fees seem counter-productive.
Adding to this, Malaysian banks are far from struggling financially. In fact, the banking sector has posted impressive profits in recent quarters. For example, Maybank saw its net [profit improved to RM2.54 bil in 3Q 2024 from RM2.36 bil in the same period a year earlier.
Similarly, Public Bank’s net profit for the first nine months of 2024 reached RM1.91 bil. These numbers suggest that banks are in a strong financial position to absorb fees for interbank ATM withdrawals.
In other words, this makes it difficult to justify why consumers should continue bearing these small but cumulative fees.
When we look abroad, there are examples of more progressive banking practices. In 2017, Australia’s largest banks, including Commonwealth Bank and Westpac, abolished interbank ATM fees.
Their decision was based on recognising the unfairness of the charges and responding to public pressure. If similar economies can make such moves, why can’t Malaysia follow suit?
The RM1 fee also raises questions about transparency. Banks have yet to clearly explain what the fee covers, especially when interbank networks have become more efficient over the years due to technological advancements.
Is this fee still justified in an era when many financial transactions cost mere fractions of a ringgit to process?
Moreover, maintaining this fee contradicts efforts to push Malaysia towards a more digital and cashless economy.
While the government and financial institutions have been promoting e-wallets and online banking, fees like these encourage people to withdraw larger amounts of cash less frequently, thus, reinforcing a reliance on physical currency.
This undermines the broader push for digital adoption. At its core, this issue is about fairness and accountability. Banks should not profit from a fee that primarily affects those with the least financial flexibility.
Instead, they should focus on expanding ATM infrastructure, enhancing digital banking services and exploring ways to reduce costs for consumers. Financial inclusion is about more than just access; it’s about making that access affordable and equitable.
Abolishing the RM1 fee would not only ease the burden on everyday Malaysians but also demonstrate that the banking sector prioritises the needs of its customers over short-term profit. This is a small but significant step towards building a fairer financial system for all.
Consumers Association of Penang (CAP) president Mohideen Abdul Kader highlights the injustice of the RM1 interbank ATM withdrawal fee by stating that it disproportionately affects those making smaller withdrawals, alluding to how the fee burdens the B40 and M40 groups which are struggling with high living cost.
“Someone withdrawing RM10 is forced to pay 10% of the amount as a fee, while those withdrawing RM1,000 only pay 0.1%.” How is this fair?
Source: Focus Malaysia (14 January 2025)