Bank accounts will be basic right under new rules

One-in-10 Irish people have no bank account, many because they have been refused one, but banks will in future be forced to open a current account for any applicant.

While they will not necessarily be given a credit card or an overdraft, they will be able to receive and make payments, and open up an account in another EU state.

“In today’s world, European citizens cannot fully participate in society without a basic bank account. They have become an essential part of our everyday life, allowing us to make and receive payments, shop online and pay utility bills,” said internal market commissioner Michel Barnier as he launched draft bank rules.

About 59m adults across the EU have no bank account and half want one. An estimated 2.5m have been refused an account. The new rules will give all a right to a basic account.

They will also be able to compare fees for the 20 most popular services as banks will have to issue a standard, easily understood leaflet with their charges, and each country will have to have a website with the fees clearly listed so everyone can compare.

Banks must facilitate customers to change banks within 15 days while they should be able to open an account in another EU state within 30 days — something that is almost impossible in some countries at the moment.

One third of all websites of banks in the EU have no information on how to switch to another bank, while studies show that fewer than 20% were successful in switching bank.

Banks use different tactics to prevent customers switching, according to consumer commissioner Tonio Borg, such as the length of time it takes. People can still be refused an account for crimes such as money-laundering or terrorism. The new rules should also create greater competition between the banks and push down fees.

Sean Kelly MEP welcomed the move, saying basic banking services were a matter of social inclusion and everybody should have a bank account and a debit card. “Debit cards offer a safer and more practical way for individuals to manage payments, instead of carrying cash. However, the fees charged for bank cards need to be considered to ensure people are not excluded due to unaffordability.”

It will be up to each country to ensure everyone has a right to a bank account, and people are not excluded by rules and costs.

ID cards

Irish citizens could have identity cards issued by the EU which would make it easier for them to move around, under plans announced by the European Commission.

Most EU countries issue their own ID cards for their citizens, but not Ireland or Britain although they have mooted such plans at various times.

As a result, Irish people moving around the EU when asked for ID have to show their passport and must carry it with them at all times.

This has been identified as one of the obstacles EU citizens face when trying to exercise their right to move freely around the EU.