The CEO of the Malta Financial Services Authority (MFSA) has urged banks to adopt more client-friendly policies when opening bank accounts, warning the situation has become “unbearable”.

“I am personally not happy with the challenges faced by businesses and individuals in opening bank accounts in Malta,” Joseph Cuschieri told Lovin Malta. “While I understand that banks need to manage risk at customer on-boarding stage including KYC and compliance checks, I sense that in many cases, things are going overboard making the situation unbearable.”

“What sense does it make when a company obtains a financial institution licence from the MFSA but is not able to open bank accounts to operate?”

“We need to have a more sensible approach to avoid unnecessary bottlenecks in our ecosystem. I am determined to address this situation with all stakeholders in 2019.”

It is notoriously difficult for expats to open bank accounts in Malta, with banks often making them go through hoops before allowing them an account. For example, expats have complained that banks had demanded a bank reference from their home country, an impossible task as they had already closed their accounts before removing to Malta.

Meanwhile, iGaming and blockchain companies are routinely denied bank accounts on the grounds that their industries are too risky – a headache for the government, which is seeking to turn Malta into a hub for disruptive technologies.

The problem has exacerbated in recent months after Satabank, renowned as the bank of choice for foreigners and iGaming companies, was placed under administration in the wake of a money laundering investigation.

Now the MFSA has launched an information campaign to inform people, specifically foreigners, that banks with more than four branches are required to offer bank accounts with basic features to everyone legally resident in Malta or another EU member state.

Several expats have complained about how hard it is to open a bank account in Malta

An information leaflet, which the MFSA has instructed major banks (namely BOV, HSBC, APS, Lombard and BMF) to place in their branches, outlines the features of basic payment accounts.

Essentially it allows consumers to: deposit funds; withdraw cash at the counters of the bank or at ATMs in Malta, Gozo and other EU Member States, pay by direct debits within the EU; effect payments with a debit card, including online payments, and receive and order credit transfers.

Clients may also be provided with an overdraft facility but only if the bank agrees to provide it to them.

The five major banks which should be providing basic payment accounts

The MFSA is stressing with banks that they are legally obliged to provide these accounts to residents, this per a 2016 EU directive that has been transposed into Maltese law. While the directive gives banks some leeway in allowing them to demand that clients show “genuine interest” in opening a bank account, it also states that that this right should not be too difficult or burdensome for consumers.

Indeed, banks are required to ensure clients don’t wait any longer than 10 working days before informing them whether their bank account applications have been accepted or refused.

This does not mean that banks have to accept every Tom, Dick and Harry, and indeed they can still refuse clients who don’t provide documents required to carry out the necessary due diligence checks, and this according to guidelines issued by the FIAU.

“The MFSA is closely monitoring the situation to ensure that Maltese and foreigners residing in Malta are treated in the same manner,” Cuschieri said. “Any consumer facing difficulties in opening a basic payment account and who considers that he/she was not properly serviced by a credit institution can either contact the MFSA or lodge a complaint with the Office of the Arbiter for Financial Services. This right of redress is also highlighted in the educational campaign carried out by the MFSA.”

Tag someone who has gone through hell to open a bank account in Malta

READ NEXT: Opening A Bank Account In Malta As An Expat Is Hard As Hell

Tim Diacono

Tim is interested in the rapid evolution of human society and is passionate about justice, human rights and cutting-edge political debates. You can follow him on Instagram or Twitter/X at @timdiacono or reach out to him at [email protected]