However, such firms can negotiate with banks to enjoy an agreeable interest rate rather than the low rate applicable to call deposits, according to the draft, which once issued will amend and supplement Government Decree 92/2007/ND-CP issued in 2007 to guide the implementation of the Tourism Law.
Currently, the Tourism Law requires only one deposit level of VND250 million for travel firms offering both outbound and inbound tourism services. In the draft, there are two deposit levels, VND250 million for firms active in the inbound segment and VND500 million for those in the outbound segment or in both sectors.
The State Bank of Vietnam provides the call deposit rate for the current deposit although firms have repeatedly asked for a maximum deposit rate.
There were 960 foreign travel firms last year, and thus the total amount of deposits kept in banks was quite huge.
A higher compulsory deposit will place a burden on small and medium firms in Vietnam, said several firms.
The director of a small travel firm in HCMC told the Daily that a higher deposit is a large amount for his firm. Although two deposit levels are mandated, there are few firms operating in a single segment, so the imminent regulation in effect requires firms to put more money in banks, he added.
Meanwhile, Vo Anh Tai, director of Saigontourist Travel Service Co. and head of the HCMC Society of Travel Agencies, said that the point did not lie in whether the deposit was high or low, but in how to use it properly.
“It will be fine if the deposit is used properly. However, it will be a waste if a large amount of money is set aside without being utilized effectively,” said Tai.
The deposit will be used to pay compensation for tourists if tour operators breach contracts or if mishaps happen to tourists.
Some countries even set up a committee working on this issue. If tourists encounter troubles, and if travel firms and banks cannot reach an agreement, the committee will take the deposit out of banks to make compensation for tourists, Tai added.