The impact of transaction account’s zero fee policy on the performance of commercial banks in Vietnam

Abstract

Recently, the serve competition in digital banking services lead to a trend in waving fees on
transaction account in order to attract new customers. The zero fee policies can reduce the banks’ fee
income. However, the banks may benefit by attracting new customers, increasing cross-selling and reducing
cost of fund… To this point, there’s no research findings on the impact of zero fee policy to the overall banks’
performance. The study estimates the impacts of free payment accounts to banks’ ROA and ROE, using
regression models and balanced panel data from 18 largest Vietnamese commercial banks during the period
of 2011-2021. The results show that the free policy of checking accounts have positive impacts on the bank’s
financial results. The survey results have found considerable effects of free payment account in increasing
brand reputation competitiveness, expanding customers. The study suggests effective fee policies for
payment accounts of commercial banks