Bank accounts for refugees – the German point of view

In 2015 over 1 million refugees arrived at Germany. Seeking refuge from war and terrorism, they place extreme demands on that country, its institutions and citizens. Credit establishments perceive arriving refugees as an opportunity for the ageing population and emphasise that proper integration will only take place when they have access to financial services.

It is not easy to function in Germany's economic life without a bank account. In Germany, a number of things require bank transfers or bank account debiting. A person without a bank account will not find a job or apartment or will not even receive tax repayments. Therefore, everyday life without a bank account is difficult in Germany, refugees included. It takes a very long time for communes to pay out social benefits in cash; also, it is expensive, as it generates high staff costs. Further, benefits for refugees paid out in cash may lead to uncontrolled cash flows and improperly stored cash may give rise to numerous conflicts. Things would be much easier if benefits were paid out via bank transfer to a bank account.

Appealing against xenophobia, banks support the integration of refugees by offering a “Bank account for everybody”. The Federal Financial Supervisory Authority (BaFin) has sent a letter to German credit establishments clarifying the additional lowering of new customer identification standards.

Since September 2015 refugees have been able to open a basic account in Germany, even if they do not have a passport or ID card. The Federal Financial Supervisory Authority (BaFin) has abated the existing provisions governing the setting of bank accounts. From now on, banks may accept any official documents containing the full name, nationality, date and place of birth and residence. They also need to bear a stamp of the foreign affairs office and signature of the issuing authority. Such documents are sufficient to open a basic account (Basiskonto). The capabilities of such an account shall be limited to cash deposits and withdrawals, direct debits, standing orders, transfers and card payments. Customers with this account shall not be allowed to get overdrafts. The bank account and cashless transaction will allow for the screening of refugees' expenditures and may prevent terrorism financing.

Since 1995 banks in Germany have had a voluntary commitment  to open the basic account for everybody. The account was used for accepting receivables, withdrawing cash, making transfers to pay bills or rents and standing orders. It had no credit facility. The setting of the basic account (Basiskonto) was voluntary and often refused by the bank. Even the lowering of standards for the identification of the bank's new customers, as introduced by BaFin, has not obliged many banks – primarily large commercial banks – to set non-profitable accounts for refugees. The government of Germany wants to impose a legal obligation on all banks to open a bank account for every person who is legally resident in the EU, including the homeless or asylum seekers and is drawing an act concerning a “bank account for everybody” (Girokonto fȕr jedermann). Starting from September 2016 every bank will have to open bank accounts for refugees and will not have the right to refuse. Customers with such bank account will not be able to get overdrafts and the account costs shall be stated clearly before the account is set and afterwards.

So far banks have objections concerning bank accounts for refugees, because, pursuant to the anti-money laundering act, they have to determine the identify of a bank account holder, which is often impossible with refugees. Nothing guarantees that lowered standards for the new customer identification will be accepted by foreign institutions which track money laundering and terrorism financing. Moreover, one cannot rule out that people or terrorist organisations will not decide to take advantage of this situation to back up criminal activities. On that account, large banks, including those which operate in international markets, have refused to open bank accounts for refugees so far. Banks such as Deutsche Bank, Postbank and Commerzbank found BaFin's recommendation to be insufficient. Once the “bank account for everybody” act enters into force, it will be grounds for opening bank accounts for refugees as well. Setting accounts with lowered standards seems to be easier for credit establishments which operate in the local or regional market only.

The largest number of bank accounts – over 100,000 – have been set by savings unions. They re-open closed branches to provide services for refugees. In many cities there are hours established when solely refugees are attended.

New provisions are especially difficult to implement for small banks and the Direktbanken – they have few branches so the organisational efforts are fairly large, regarding mostly correspondence with offices or the involvement of translators/interpreters. 

Anna Dąbkowska



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