LONDON Dec 12 Fewer than a tenth of the
no-frills bank accounts provided by Lloyds Banking Group
conform to new guidelines requiring such accounts to be
fee-free, data from Britain's finance ministry showed on Monday.
The data are the first official study of banks' provision of
these basic bank accounts in Britain since the Treasury
department and nine biggest lenders agreed new guidelines in
2014 stipulating that such accounts should not charge any fees.
The rules, which came into force on Jan. 1 this year, are
designed to widen access to banking and help vulnerable
customers avoid running up huge fees by requiring banks to
provide simple accounts that do not charge for basic services.
Lloyds provides half of the just under 8 million basic bank
accounts in use in Britain, the data show. Fewer than 250,000 of
the bank's nearly 4 million accounts are fee-free according to
the terms of the 2014 agreement, although all new accounts
opened with the bank since the start of the year are.
"We welcome (the) data which shows that Lloyds Banking Group
is opening 36% of the new basic bank accounts, demonstrating our
commitment to support banking for all," a spokesman for Lloyds
said in an email to Reuters.
Seven of the nine participating banks said all of their
basic accounts are fee-free and consistent with the terms of the
agreement, the Treasury reported.
The data, which cover the first six months of this year,
show that nearly half a million new basic bank accounts
consistent with the new rules were opened in Britain this year,
with Lloyds opening the most.
Basic bank accounts have been available in Britain for more
than 10 years, but only since the voluntary agreement between
the nine biggest lenders and the Treasury in 2014 have they been
required to be fee-free.
The accounts are available to customers who do not have a
bank account or are ineligible for a given bank's standard
Banks have said that providing such accounts to the
financially vulnerable is a loss-making business for them, and
larger lenders including Barclays and Co-Operative Bank have
called on smaller lenders to share the burden.
(Reporting By Lawrence White)