Hi Shona.

It is a real shame, though their position seemed very difficult given the lack of contribution to financial inclusion in this area by every other bank other than Barclays.

I understand that the relevant Minister, Jo Swinson, has today called upon the banking industry to find a solution.

I opened a bank with the Co-operative not long before my Trust Deed. I did not know at that time they were considered helpful to people in my position. I have operated my account without any problems and I am now awaiting discharge from the PTD.

In reading this news, does this mean that Trust Deeds fall within the Undischarged Bankruptcy heading?

Does this mean that it is a real probability that someone with a Trust Deed may not be able to operate any kind of bank account? And consequently, may not be able to have a job, since most companies pay directly into a bank account?

I don't think it should be left to only one or two banks to support every person with Trust Deed or Bankruptcy, however, it would seem a critical situation if no bank will offer a bank account?

Perhaps I am not understanding the issue. It is almost midnight if that is an excuse :-).

Hi Firewalker.

We're both up late!

Fortunately this issue relates to bankruptcy only. Trust deeds are different and most banks offer an available basic account.

Barclays still offer an account for bankrupts, and there are paid for alternatives as well.

Interesting the governments new universal credit system will make it mandatory to have a bank account so that's going to be a problem needing resolved, the bankers association saying bankruptcy is never the only option is to a degree true but particularly when you will be bailed out by the taxpayer as are the majority of the banks were

As I understand it the majority of banks will honour the accounts of existing customers who become bankrupt and will not close them down. This might be different if you owe them money, however, in which case it really is a necessity to get another bank account opened before the bankruptcy takes place (might be best to do this either way in case required as a fall-back option).

If you are made bankrupt and do not have a bank account already then there is only Barclays among the major high street banks that will entertain you.

Thanks for the clarification. It will be interesting to see how this develops and the long term impacts.

It will be interesting.

To an extent it's about whether banks should be expected to play a social role (given that their service is pretty much essential for individuals now) as well as being commercial operations responsible to their shareholders.

Or, if you believe that they occupy a privileged position, whether their privilege is accompanied by certain responsibilities.

The banks must have a responsibility but bankrupts rarely have a loud enough voice to be heard.

Wonder what all the big stars do? I assume they use paid accounts(handy but not when every penny counts).

Paul

I think banks who've been kept afloat by public funds absolutely have a social responsibility.

This really is a very complex issue.

For example, I think most people would agree that banks kept afloat by the taxpayer gained some obligations and responsibilities.

However we suspect that providing bank accounts to bankrupts isn't a profitable activity (let's face it, they'd all be at it if it was!).

Therefore a single bank taking on tens of thousands of these types of account may become less profitable, something many taxpayers wanting to see their money come back might not welcome.

It just seems like every bank should be asked/expected to do their bit in this respect. That way any associated cost is fairly spread amongst all of these banks (who all actually benefit from the implicit support of the taxpayer... even those that didn't take the cash).

A bit like the existing basic accounts I suppose. I think every major bank offers one of these so the market is spread.

I think that this will have to be addressed before the universal credit comes in. A higher proportion of state benefits will be drawn by people in difficult financial situations. If there is no access to basic accounts for them how will they get their money? There should be quota of basic accounts based on the number of accounts a bank holds that they must make available to everyone.

To be honest I don't see why providing basic banking facillities should present a problem to any bank.

The basic bank account does not have an overdraft facility and does not provide the holder with a cheque book, therefore the account holder is only having money paid into their account and then having the faciltiy to withdraw that money for everday use.

Maybe I am being a little to simplistic or is it that these basic accounts are not giving the banks an opportunity to profit in any way from the account holder?

Hi gresgow.

One of the senior managers at Co-op was on the radio this afternoon.

He admitted that the cost of running these accounts was an issue (not just for them, for all banks it would seem).

Banks make their money from charging interest (overdrafts, credit cards and loans) and from paying low or zero rates of interest on deposits.

Where they cannot provide credit, and the account balance will typically be modest, there isn't much in it for them it would seem. The contention seems to be that the operating costs are higher than the revenue generated.