EU aiming to make it easier to switch banks

EUROPEANS will find it easier to open and switch bank accounts and see what fees they are being charged, under new rules proposed by the European Commission.
By The Newsroom
Published 11th May 2013, 01:01 BST

The proposal, which could become law in the European Union in three years, requires banks to shoulder the administrative burden when clients switch accounts, such as transferring direct debits. The draft law will also oblige banks to spell out their charges in a standardised way, making it easier for customers to compare.

The EU executive, frustrated that efforts to cajole banks into better self-regulation are not working, will also suggest giving citizens the legal entitlement to open an account. The Commission wants at least one bank in each country to offer a basic account, allowing people currently outside the banking system to deposit cash and pay bills.

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Studies by Commission officials showed that banks did not offer enough information on switching accounts and that consumers did not know what fees they paid for banking services.

The studies also found that 58 million citizens in Europe had no bank account, including half the populations of Bulgaria and Romania. The proposals will go to EU member states for their approval or possible change before they can be introduced.