Don't bank on opening an account back home

Anyone with a relative planning to return to the Celtic Tiger economy would be wise to warn them about the difficulties and inconvenience they may face when trying to open a bank account.

A reader who returned from Australia last year has detailed her experiences and questions whether Irish banks could be more welcoming to returned emigrants.

Mrs L, who is originally from Limerick, knew for the best part of a year that herself, her husband and two children would be setting up a home in Ireland towards the end of 1999.

Issues such as accommodation and employment options had been largely sorted out some months before their return, with the mundane issue of opening a bank account causing the greatest degree of frustration and dissatisfaction.

Mrs L phoned a branch of AIB close to where she grew up to enquire about opening an account and to arrange the electronic transfer of a substantial sum of money into that account before they left Australia.

Having lived abroad for a number of years such cash transfers had always been easily arranged. But when she tried her own local bank, problems emerged.

The bank official explained it would be impossible to open a bank account without physically presenting herself at that branch. The solution offered was that she should bring a cheque with her and come in and lodge it upon her return.

Mrs L was naturally reluctant to have to take the responsibility of carrying a large amount of money with her at that time and felt the bank could have been more accommodating.

In the end, she had to have the funds transferred into a relative's account in another bank.

AIB was adhering to the terms of the Criminal Justice Act, which discourages banks from opening accounts for customers unless they have had face-to-face contact with them.

Under the Criminal Justice Act, the onus to verify the identity of the account holder falls on the individual official who opens the account. According to the Act anyone opening a bank account needs to bring proof of identity, usually a passport or a driving licence and you will also need proof of your current permanent address such as an electricity or telephone bill.

While Mrs L may have been forgiven for thinking everything would be plain sailing once she was in a position to walk into a bank and open an account nothing could have been further from the truth.

While she did have a passport and other forms of identity, they did not have a permanent address as they were, not surprisingly, living in rented accommodation immediately upon their return.

For the same reason, she was unable to produce a utility bill in their name to confirm where they were living, so once again they ran into difficulties.

At this stage, an account was opened at the bank where her relatives were customers but, even then, they were granted only limited access to their funds. The bank refused to provide them with a laser card or cheque book, forcing them to have to queue up every week at their branch to take out money.

Some months on, they have now been granted such facilities but are pretty disillusioned with how they were treated.

An AIB spokesman admitted it is virtually impossible to open a bank account while you are still living abroad and that, in most cases, people transferring funds to Ireland must wait until they arrive here to do it.

"The bank is bound by legal requirements. There is a provision within the Act to facilitate people in exceptional cases but the process involved in very cumbersome and is something a bank manager may be reluctant to do," he said.

The bank said a letter of introduction from an international financial institution where you are a customer may speed things up initially.

Another way is to get a letter of introduction from an employer. The letter, which should be on headed notepaper and signed by an authorised signatory, should confirm identity, the date at which you started work and a social insurance number if possible. This letter will only be valid if the employer already has a relationship with AIB, according to the bank.

When a new account is opened, all financial institutions will run a general credit check with your previous bank to determine credit worthiness. This can take some time and create further confusion, depending on the location of the former bank and the way it rates its customers.

AIB said, as a rule of thumb, it is normal for a customer to have to have a current account for six months before they will be issued with a cheque book or laser card. This can be accelerated if you have relatives, who already have a relationship with a bank manager, the spokesman said.

"It's like getting a loan. If everything you say on the application checks out, an assessment is made. If you have a permanent job, you could be offered these facilities immediately." In reality, few people returning to work here are walking into a permanent job. Most new employment is on a contract basis and there will also usually be a probationary period, which would encourage the bank to exercise caution in these cases.

The sharp rise in the number of returning emigrants and, indeed people moving here for the first time, has coincided with the introduction of the Criminal Justice Act, which governs the way all banks must deal with their customers.

Anyone now opening a bank account will have to go through the administrative equivalent of the third degree. Those wishing to open accounts by post, phone or Internet may face even more checks. It is all part of the continuing drive against money laundering and is not unique to the Republic. Similar provision now exist in the UK and in most international economies.

Financial institutions are also legally obliged to report any suspicious activities to the Garda. Although the goal of preventing money laundering is wholly desirable, financial groups in the UK have recently begun to question whether the whole procedure is unnecessarily complicated. This would certainly seem to be the case as it applies to returned emigrants but unfortunately there is no sign of any impending easing of the rules. One option may be to try to keep a few pounds in an old student bank account and hold it as a non-resident. Of course, in the light of current plans by the State to tackle dormant accounts, one would need to ensure the money did not stay untouched for too long.

AIB said keeping a small amount in such an account will not necessarily make any difference in granting you faster access to a laser card or cheque book or other bank services but it will at least give you a bank account.