Mr. Oliver Gilvarry:

I thank the Leas-Cathaoirleach and the committee for having us here today. I am heading of banking and financial stability in the Department of Finance. I am joined by Mr. Palmer, who works with me in the division, and Ms Susan O'Reilly, who is leading the team developing the new national payments strategy that will be the successor to the 2013 national payments plan. The latter forecast that Ireland would not become a cashless society but that it would become a "less-cash" society. Domestically and internationally, the trend towards electronic payment options is clear and strong. Prior to the Covid-19 pandemic, just under €20 billion was withdrawn from ATMs in the State annually. That figure was approximately €13.5 billion in 2022, a decline of just under one third. However, the retail banking review in November 2022 highlighted that cash still has an important place in the economy and is important to consumers in all walks of life. Cash is a crucial budgeting tool for many of those on fixed and lower incomes. It also allows individuals, including those who are older, to control their finances and maintain their financial independence. It is also important to small and medium enterprises.

In light of the need to ensure that cash remains widely available and accessible, the banking review recommended the preparation of access to cash legislation to ensure the continued reasonable access to cash in the State. The main objective behind the proposed legislation is to establish a framework to provide that any future evolution of the cash infrastructure is managed in a fair, orderly, transparent, and equitable manner. The proposed legislation will initially provide that this infrastructure is preserved at approximately December 2022 levels, accounting for the exits of KBC and Ulster Bank. It will allow for the setting of minimum numbers of ATMs per 100,000 people, and minimum distance criteria for access to an ATM or cash service points, such as bank branches and An Post offices, on a regional basis.

The regions for this proposed legislation will be the nomenclature of territorial units for statistics, NUTS, 3 regions established under the Eurostat criteria classification. There are eight such regions in Ireland. The general scheme requires designated entities, which will initially be the three main retail banks, to be responsible for maintaining access to cash levels. The general scheme also provides for the registration and supervision of ATM operators and cash-in-transit firms by the Central Bank. The bank will have the necessary powers to ensure compliance with the access to cash criteria.

It is important that consumers across the country can access their cash, even where the criteria are technically being met. To ensure there are no gaps in coverage, the Bill provides for the potential remedying of local deficiencies. These are locations within a NUTS 3 region where particular difficulties in accessing cash arise. The public will be able to inform the Central Bank where their access to cash is inadequate, and the bank will have a framework for responding to and remedying these deficiencies where appropriate. The Central Bank will prepare and publish guidance on local deficiencies before the framework is implemented.

While the general scheme introduces new obligations, the legislation has been drafted to avoid imposing an excessive burden on the designated entities. Accordingly, it contains provisions for the criteria to be reviewed following updated census figures, or if cash demand drops significantly in a calendar year compared with the previous year. The Minister for Finance can also request a review to be done and the Central Bank may also conduct a review on its own initiative at any time. These provisions ensure that the criteria can be adjusted in response to the demand for cash in the State, should it continue to decrease, or begin to increase.

Separate to the matter of access to cash, the national payments strategy being led by Ms O’Reilly is considering the issue of the acceptance of cash in line with its terms of reference. A public consultation closed in mid-February and the strategy will be completed later this year. This work dovetails with an EU proposal on legal tender, which is currently under consideration in the relevant council working group. The legal tender proposal will look at access to and acceptance of cash across member states. It proposes to place an obligation on member states to monitor access to cash, with a need to assess the level of cash access annually and report their assessment to the Commission and the ECB. If a member state’s assessment is that there is not sufficient and effective access to cash, it will be required to take remedial measures. We are available for any questions that the committee may have.