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Travel firms with collateral allowed to negotiate rates

Update: March, 15/2012 - 10:13

HA NOI — The Viet Nam Administration of Tourism (VNAT) has agreed with the State Bank of Viet Nam to allow travel firms with collateral deposits at banks to negotiate interest rates directly.

The statement was made by Deputy Director of the Travel Agent Department Pham Le Thao.

Under the current regulation, travel firms can receive only non-term interest rates for their collateral deposits kept at banks and used as compensation for tourists when agents violate contracts or deal with risks.

The change comes under a draft decree on revising the Law on Tourism compiled by the VNAT and to be submitted to the Prime Minister for approval later this month.

Under the draft decree, travel agents offering outbound services will be also required to double their collateral deposit to VND500 million (US$23,800) against the current rate.

Current regulations set collateral deposits at VND250 million for both outbound and inbound tourism. The draft leaves the deposit for travel firms with inbound services unchanged, but doubles the rate for firms offering only outbound or both services.

Travel agents were concerned that the draft could cause them difficulties if approved. They said that since most travel agencies were small- and medium-sized enterprises, new capital regulations could place strain on operations.

However, Thao said, the increase was reasonable as the deposit of VND250 million had been regulated since 1995.

Moreover, deposits would act as a sanction to protect tourist interests, Thao said, adding that the tourism administration had consulted many relevant ministries and bodies before making the proposal to increase collateral deposits.

Thao said that next time, the administration might also ask relevant ministries to raise the insurance premium for tourists as current regulations did not detail such rates. — VNS

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