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Lloyds Bank is one of the British banks that has decided that it would be an unjustified cost for them to obtain a work permit in the countries of the European Economic Area and will close the current accounts of people and companies in the EU member states. PHOTO: Reuters
Due to Brexit, they lose the right to operate in the EU if they don’t have a special one license
British banks have started to close thousands of customer accounts outside the UK. The reason is that after Brexit, they lose the right to provide services to people in the EU if they don’t have a new special license. This will affect both the British living in these countries, as well as the companies and individuals who have simply chosen British vaults for their money.
So far Lloyds Bank, Barclays, Barclaycard and Coutts have sent letters to their overseas clients telling them that they will close their accounts within two months. The victims include people living in Germany, the Netherlands, Italy, Portugal, Ireland and Slovakia.
“I was surprised to hear that my bank account would be closed in two months if I did not provide an address in the UK,” Sharon Clark, an Englishwoman who has lived in the Netherlands for 20 years and is a Lloyds client, told the BBC. The bank has already sent 13,000 messages of this type to citizens and companies to stop offering banking services in European countries. Clark has been given until the beginning of November to transfer all of her money and the traditional payments she makes to another financial institution.
Robert Kang, who lives in Spain but has a Barclays credit card, is in the same situation. He admits that he was offered no choice but to close his account and destroy his card after he replied that he did not have a UK address because he left it 14 years ago.
Banking rules across the EU will no longer apply to the UK next year, said Sarah Hall, who is part of a team at King’s College London to study Brexit changes.
This means that the so-called certification of financial institutions, which allows them to trade freely in any other country in the European Economic Area without the need for additional permits, will not be valid for them. To work, they will need to have a special license or a subsidiary in a country.
Some banks have decided that this is an unjustified expense given the number of clients they have in other countries and it is better that they leave these markets, explains Hall. So far, only HSBC and Santander have said they have no plans to close their clients’ accounts in the EU.
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