Select Committee on Treasury Appendices to the Minutes of Evidence


Further memorandum submitted by Barclays Bank

  I am pleased to provide the further information on our basic bank accounts (we call these Barclays Cash Card accounts) which you have requested:

    —  Barclays Cash Card accounts are available through all of our branches in the UK and where leaflets are available explaining the account's features. These include an ATM card, direct debit facilities and automated credit transfer for those receiving wages or benefits. The account has been structured in such a way that customers cannot go overdrawn and get themselves into debt. However we do provide a £10 buffer zone that enables customers to withdraw the last £1 from the account if they wish. The Cash Card account is fully integrated into our account application and opening process and if this is considered to be the most appropriate account for a particular customer, then this will be offered.

    —  In addition to our in-branch activity we are also exploring ways of reaching financially excluded people through third parties. For example, we have developed links with East Lancs Money Line and Salford Money Line—organisations that provide affordable credit to the financially excluded. Both Money Lines refer their unbanked clients to us for basic account opening purposes.

    —  Other examples of third party links include the Community Finance and Learning Initiative pilots (CFLIs) supported by the DFES. The pilots aim to promote education opportunities, financial literacy training and access to financial services in deprived areas of the UK. Barclays is supporting the CFLI in Gorton, East Manchester in a number of ways, including opening Cash Card accounts for financially excluded residents in the area. Barclays is currently developing similar links with two other CFLI pilots in Tower Hamlets and Hackney.

    —  The success of our approach is evidenced by the fact that we now have 160,000 Cash Card accounts, opening at a rate of 8,000 to 10,000 per month. Indeed 20,000 accounts alone have been opened since the hearing in May at which we and other banks gave evidence. This volume now represents 25 per cent of all our "new to banking" account recruitment.

    —  Woolwich, which has been part of the Barclays Group since 2000, is also running a pilot service called Open Plan for Everyone in conjunction with People for Action and a number of Housing Associations in Leicester, Birmingham, South East London and Leeds/Bradford. This account provides all the services of the Cash Card account, as well as telephone, internet and digital TV access together with "savings" pots to help with household budgeting. The account is available from Housing Associations, which already have a trusted relationship with the communities they serve and are authorised by Woolwich to complete applications with tenants in their own homes.

    —  As far as the conversion of Cash Card accounts to standard Barclays Bank Accounts is concerned, Cash Card customers can apply through our branches for an upgrade at any time. However, since the account has been in existence for less than two years (launched in October 2000), almost all these customers are relatively new and we would therefore not expect to see a significant volume of upgrades to standard accounts for some time yet.

  I hope this is helpful and please let me know if we can be of any further assistance. Finally, I am enclosing a copy of our 2001 Social Environment report which includes further information on our socially inclusive and community activities.

July 2002

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