Vietnam’s Techcombank is introducing new fees to close off an arbitrage opportunity that has prompted Vietnamese residents to withdraw millions of dollars in cash from Cambodian ATMs in order to benefit from the gap between the official and unofficial exchange rates in their country.

The Vietnamese government has set the country’s exchange rate at roughly 19,500 dong to the US dollar, though the black market rate – also used legally by money changers in Cambodia – is about 21,000 dong to the dollar.

Bankers in the Kingdom say that since last month, Techcombank cardholders have flocked across the border to clean out Cambodian ATMs.

The withdrawals they make come from their home accounts, denominated in dong, and the dollars they receive are converted at the official exchange rate.

The Vietnamese visitors can then change these dollars for dong with Cambodian money changers or black market traders in Vietnam, earning the difference between the rates.

While most Vietnamese banks charge international transaction fees to make up for the difference between the official and unofficial exchange rates, Techcombank’s fees are unusually low, creating a money-making opportunity for savvy cardholders.

All this is about to change, however. Dich Vu Khach Hang, a Techcombank customer service representative, said in an email on Friday that the bank was wise to the scheme and was taking steps to prevent it.

“We have known via [a] number of sources about the Techcombank Visa Debit cardholders [withdrawing] cash at ATMs in large numbers in Cambodia to take profit from the exchange rate differences,” Dich said.

“In order to prevent this, we also are preparing to issue a new fee policy [in] which we will raise a special fee apply[ing] for transactions of withdraw[ing] cash and foreign currency.”

Stephen Higgins, the CEO of ANZ Royal Bank, said Techcombank cardholders have withdrawn at least US$20 million in cash from Cambodian ATMs this month.

Although transaction fees eat into their profits, Higgins estimated that the cardholders stand to earn roughly $20,000 for every $1 million withdrawn.

Techcombank, he added, has likely lost about $1.5 million from the scheme.

While Cambodian banks are not losing any money in the process, the transactions have created a nuisance for regular customers who are increasingly likely to find their ATMs out of service.

ACLEDA Bank and ANZ have blocked Techcombank cardholders from using their machines, and Higgins said the National Bank of Cambodia sent out a circular on Friday warning about the scheme.