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OTTAWA (Reuters) - Canada's eight largest banks have agreed to provide no-cost accounts to 7 million low-income people, Finance Minister Joe Oliver said on Tuesday as part of the Conservative government's consumer protection agenda ahead of a 2015 election.
The banks will introduce voluntary guidelines in January 2015 allowing qualifying seniors as well as students and youth to access the free accounts.
"Our government believes Canadians deserve to keep more of their hard-earned money," Oliver said in a statement.
"I applaud the eight major Canadian banks for their commitments to address the needs of consumers, and I look forward to seeing these commitments become reality,” he said.
Three of Canada's biggest banks have reported bigger-than-expected profits in the second quarter, highlighting the strength of the sector and wealth management profit growth, despite signs that heavily indebted Canadian consumers are slowing their borrowing.
The eight major banks are Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Laurentian Bank and Canadian Western Bank.
The no-cost accounts will have the same features as existing low-cost accounts offered by the banks.
These now include at least 12 debit transactions per month, up from eight previously, and no extra charges for deposits or debit cards. The low-cost accounts cost C$4 ($3.70) per month.
The Conservative government of Prime Minister Stephen Harper outlined a pro-consumer agenda in its budget in February, touting measures aimed at lowering prices of mobile phone services, banking services and narrowing the price gap between retail goods in Canada and the United States, among others.
Reporting by Louise Egan; Editing by Marguerita Choy