BRUSSELS, Nov 8 (Reuters) - The European Union said on Monday it would lift visa requirements for travellers from Albania and Bosnia next month, aiming to encourage democratic reforms in the Balkan states, but warned that restrictions could be re-imposed if travel rules are abused.

The bloc's home affairs ministers approved a proposal by the EU executive, the European Commission, to scrap travel restrictions for holders of biometric passports, that have a digitally recorded photo, during a meeting in Brussels.

However, they insisted the European Commission would continue to monitor how the two countries comply with EU rules on border controls and passport security, underscoring reluctance in the bloc to open up to unrestricted travel.

Some EU governments doubt the two EU membership hopefuls can cope with issues such as illegal immigration and trafficking along drug routes from Asia to Europe, because of weak institutions and alleged corruption.

Such concerns increased after a relaxation of visa requirements for citizens of Serbia, Montenegro and Macedonia last year led to a spike in applications for asylum in the EU from the three western Balkan states.

"This has ... prompted the European Commission to set up a post-visa monitoring process that aims at preventing risks of misuse and abuse of the asylum procedures," said the EU's commissioner for internal affairs, Cecilia Malmstrom.

"A visa-free regime also comes with responsibilities," she said in a statement, commenting on the ministers' decision.

The ministers warned Albania and Bosnia, as well as other Balkan EU hopefuls, that visas could be re-imposed if travel rules are abused.

Along with the other Balkan states, Albania and Bosnia hope to join the 27-member European Union, but face years of difficult democratic reforms that have been slow to take off because of ethnic tensions and alleged corruption.

In Albania, controversy over 2009 national elections continues to hamper relations between the government and the opposition, resulting in a policy standstill. Bosnia is mired in ethnic strife between Serb, Croat and Muslim parties.

EU governments have so far discouraged Bosnia from submitting an official application to join the bloc, saying its democratic reforms are too far behind its regional peers.

Albania has applied but is expected to suffer a setback this week, when the European Commission is expected to deny Tirana the status of EU candidate for now.