Germany to oblige banks to offer accounts to refugees

Germany's cabinet signed off on a draft law on Wednesday which will make it easier for hundreds of thousands of asylum seekers in the country to set up bank accounts.

Under the new rules, everyone will have the right to access basic banking services, including the homeless and people who fall under the protection of the Geneva Convention on Refugees.

Germany expects between 800,000 to one million people, many fleeing war zones in the Middle East and Africa, to arrive this year, although not all of them will be given asylum. Giving refugees access to current accounts is seen as a vital first step to help them integrate them into society.

"Those who don't have a bank account, don't have good prospects on the labour market. Hunting for a flat is also a problem for many people without an account," said Justice Minister Heiko Maas.

In Germany, the number of people without a bank account is in the high six figures, according to estimates by the European Commission, and that figure is expected to rise due to the influx of refugees.

Until now, only a few saving banks, which are publicly owned or controlled, have accepted refugees as customers. Asylum seekers were often turned away by other banks since they had no fixed address or lacked the necessary documents.

Under the draft law, which must be approved by parliament to go into effect, all banks that offer current accounts would be obliged to do so for a wider group of consumers.

Last month, Germany's financial watchdog Bafin said it was going to allow banks to accept a broader spectrum of documents, such as papers provided by Germany's immigration authorities.

The draft law also obliges banks to become more transparent about their charges and make it easier for customers to change bank accounts.