Think-tank criticises BoI over extra fees
Changes by Bank of Ireland that will result in thousands of its customers being hit with new current account charges have been heavily criticised by the State's leading think-tank.
The Economic and Social Research Institute (ESRI) said the bank's move would worsen the current situation where 20pc of households do not have a bank account.
The fact that one-in-five households in this country does not have a bank account meant banking exclusion in this country was three times higher than the average in the EU.
Breaking down the figures, it means around 300,000 households do not have access to a bank account.
Having a bank account is important when it comes to gaining access to affordable credit. Otherwise, people could be vulnerable to moneylenders, the ESRI found in a study on financial exclusion and over-indebtedness in Irish households.
One of the authors of the study, Helen Russell, said all households needed access to a low-cost bank account to avoid being exploited financially.
She criticised BoI for changes -- introduced last month -- to the way it operates its current accounts.
From February 21, the bank's 1.2 million current account customers will have to meet stringent criteria to avoid paying fees. They will have to lodge €3,000 to their account and make nine debit payments using Banking 365 during the fee quarter.
Alternatively, customers will be entitled to free banking if they maintain a minimum credit balance of €3,000 in the account throughout the quarter.
The changes do not apply to student, graduate or golden years accounts.
But Dr Russell said the BoI changes were a move in the wrong direction, and would make accessing a bank account more difficult for those on social welfare, the low paid and the poor.
She also hit out at the delay by BoI and AIB in introducing basic bank accounts. A basic account allows customers to receive money and pay bills.
The two banks gave a promise to bring in basic bank accounts when they first got state funding back in 2008, Dr Russell said. But there seemed to be no timescale attached to this commitment, she added.
The numbers who do not have a bank account tend to rise for those with low education qualifications and among poorer households.
Around half of local authority tenants and almost a third of those over the age of 55 do not have a bank account, the study of data from 2008 found.
The study also found that in 2008, at the onset of the recession, households were building up high levels of debts.
The analysis suggests that lack of resources, rather than over-borrowing or high consumption, was the main factor behind over-indebtedness in 2008.
BoI said that it was actively working at an industry level with the Department of Finance to bring in a new basic account.