Bank account exclusion 'rethink' needed, says minister

Wallet Basic bank accounts are aimed at those with a poor credit history

Banks need to "look again" at financial inclusion after new bankrupts saw the end to a choice of bank accounts, a minister has said.

The new consumer minister, Jo Swinson, said that the Co-op's withdrawal of basic bank accounts for undischarged bankrupts was "disappointing news".

She said the government would continue discussions with the banks.

Barclays is now the only bank to offer a bank account to people in the 12 months after a bankruptcy order.

'Opportunity'

People who have been made bankrupt are generally only allowed to open a basic bank account.

These accounts do not offer overdrafts. Some have a debit card, but only with limited facilities. They do not incur a monthly fee.

On Monday, the Co-op changed its basic Cashminder basic bank account, arguing that all banks should work equally to offer help to those who have been financially excluded.

"The withdrawal of a basic bank account for undischarged bankrupts is disappointing news. Removing options, where there is already limited choice, will only harm those needing access to basic banking services," said Ms Swinson.

"This should be an opportunity for banks to look again at this issue and work with government to make some real progress."

The British Bankers' Association, which represents the UK's major banks, said that banks faced other difficulties if they decided to take on bankrupt customers.

"Banks who accept bankrupt customers open themselves to potential legal challenges from their customer's creditors, who could have a legal claim to money passing through the account," said a BBA spokesman.

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

  • Peaky Blinders publicity shotBrum do

    Why is the Birmingham accent so difficult to mimic?


  • Oliver CromwellA brief history

    The 900-year-story behind the creation of a UK parliament


  • Image of Ankor Wat using lidarJungle Atlantis

    How lasers have revealed an ancient city beneath the forest


  • TigerBard taste? Watch

    Are trailer videos on social media spoiling theatre?


  • Tesco signBest before?

    Has Tesco passed its sell-by date, asks Richard Anderson


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.