Before the move was initiated last Friday, customers were allowed to withdraw money from any ATM for free, no matter which bank it belonged to.

The bank justified the charge by saying that each time its customers use a non-CCB ATM, it has to pay the related banks a sum for the cost and maintenance of their machines. The inter-bank service fee increased on July 1.

The explanation makes sense, since the bank is a profit-oriented business and its costs must be calculated and controlled.

The practice is popular in some other countries, and banks have their reasons for implementing such charges. However, as the first bank to openly charge a fee for such a service on the Chinese market, CCB is taking some risks.

As a commercial move which may trigger a market reaction, collecting fees is a way of telling customers that profit is more important than service.

Two yuan may be nothing to some people, but it is enough to drive a customer away.

Should a customer stay loyal to a bank which does not meet his needs when there are other choices? A negative answer is fully reasonable.

CCB's move is a miscalculation which may result in the collection of a small amount of fees at the price of the loyalty of a large group of customers.

Without customers' loyalty, a financial institution doesn't even need to think about earning profit.

More than 80 per cent of bank clients hold small amounts of deposit. Their daily use of banks is limited to depositing and withdrawing their money.

Charging them for such a service will only push them to keep their distance from the bank, and will not attract them to new services like personal financial consultation, which generates far more revenue for banks.

In a market where customers are free to choose, marketing skills may make or break a business. CCB's decision is not a good example, but fortunately there are many other banks from which to choose.

(China Daily July 26, 2002)