Poverty watchdog calls for 'no frills' accounts for poor
Wednesday October 01 2008
"NO FRILLS" bank accounts to bring thousands of financially excluded people into the banking system were urged yesterday as it was revealed that one in 10 of the country's adults doesn't have an account.
On the day the Government intervened to safeguard the banking sector, the State's poverty watchdog called for the scrapping of stamp duty on ATM cards and for free transactions as part of a series of measures to encourage more people into the banking system.
The Combat Poverty Agency (CPA) said its launch of a new study on financial exclusion in Ireland came at the perfect time for the Government to encourage banks to provide basic services for low-income customers.
Its call for the no-frills accounts came as the Irish League of Credit Unions laun-ched its latest national campaign warning of the dangers and cost of using moneylenders.
CPA revealed that about 340,000 Irish adults do not have bank accounts, while a fifth of households were without a current account. The figures put Ireland fourth out of the 15 EU states for "financial exclusion" -- a term that refers to the difficulties people encounter in accessing or using mainstream financial services.
Without access to mainstream banking, many people turn to moneylenders for credit, according to CPA acting director Kevin O'Kelly.
He revealed that 20pc of adults in Ireland use unauthorised moneylenders, incurring interest rates ranging anywhere from 23pc to 200pc per annum.
Features of a no-frills bank account would include no minimum opening balance, a debit (or ATM) card free of government stamp duty charges, free transactions, direct debit and standing order facilities, but no overdraft facility or cheque book.
- Fergus Black
