Bankrupts unable to open bank accounts

As the number of bankrupts in the UK continues to grow there is concern that many banking operations in the UK are preventing the opening of very simple and non-credit-based bank accounts. There is no legal reason why a bankrupt should not be able to have access to simple banking operations with no credit and no overdraft facilities are available. So why are UK banks doing this?

From a banking point of view there is no doubt that bankrupts do potentially offer a higher degree of risk although if these bank accounts are only used to collect money and pay money out, with no credit facilities, then what is the problem?

While there are obvious losers as and when a person is declared bankrupt, with creditors often having to write off significant amounts of money, there is also a need to give these people the chance to start again. If they are unable to open simple bank accounts then this drastically reduces their ability to fend for themselves and indeed many are struggling to even arrange payment of benefits.

There are now calls for the UK government to step in and make it illegal for any bank to reject an application for a very simple bank account with no credit facilities whatsoever. Whether the government will do this remains to be seen.