Eugene Murphy (Roscommon-Galway, Fianna Fail)
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Comghairdas leis an Aire Stáit. I congratulate the Minister of State, Deputy Phelan, on his appointment. I know how much it means to him and I have no doubt he will be highly capable in his new post and I wish him well. I hope that the Government will last a few years and that he will have an opportunity to shine in his role.

The withdrawal of a number of services from small rural bank branches across the country is causing widespread anger, concern and frustration among business people and the elderly. This is a serious problem in the Roscommon-Galway constituency I represent. Bank of Ireland has proposed to withdraw counter staff and cash facilities from a number of rural branches as part of a move to introduce and an advice and self-service type model. Yesterday, my constituency colleagues and I met officials from Bank of Ireland in Leinster House. Unfortunately, the bank is not for turning on this issue. We must shout "Stop" and fight back against this retrograde step.

Small rural bank branches are under threat. The problems in my constituency are in Dunmore and Ballygar, County Galway, and Elphin and Strokestown, County Roscommon. The removal of counter staff and cash facilities would place another major obstacle in the way of businesses which are already struggling to survive and operate in rural areas. I am sure the Minister of State will be aware of such businesses in his constituency. It is important that bank services continue.

I have major security concerns about the banks' proposal that cash services be made available through a courier. Every time a business service is withdrawn, it undermines the ability of small businesses to survive. Many rural businesses are already crippled with rising commercial rates and appalling broadband connectivity. It beggars belief that the banking sector now proposes to place another obstacle in their way.

We should be encouraging and supporting small businesses in rural Ireland, not making them continually jump through hoops. Take for example Dunmore, County Galway, where business people are rightly up in arms. They are fearful that the removal of cashier services will impact on the elderly, resulting in people taking their business out of the region. That is what will happen. For many rural towns like Dunmore, Elphin, Strokestown and Ballygar, the bank was a major focal point and brought a great deal of spin-off business to their regions.

The withdrawal of a number of services in rural branches severely impacts on the elderly, many of whom may not be computer literate or have an online presence. There is a major push by the banking sector to reduce staff numbers as part of a cost-cutting exercise and replace them with technology. There is a major emphasis on trying to move customers towards an online presence with limited or no human interaction at branch level. This will not work for everyone. Rural counties like Roscommon and Galway have a significantly higher percentage of older people, who will be alienated by this latest move to withdraw services from rural bank branches. What are we going to have next? Will there be drive-thru banks? If high-tech banks with video tellers became the only option, they would not work in Roscommon because we do not have broadband connectivity.

The Minister of State is well aware of the situation. I admit that banks are there to make a profit, but we must address this issue. I await the Minister of State's reply with interest.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I thank the Deputy for his kind remarks. The Minister cannot attend. He was at Dublin Castle today and was present in the Chamber for an earlier debate, but he has had to step out. I am happy to take this matter in his stead.

The issue the Deputy has highlighted about the diminution of services in rural areas is a real one, but he also acknowledged that the State had a 14% share in Bank of Ireland, so the idea that the State can tell it which branches to keep open and closed does not arise. The Deputy correctly referred to the banking sector reducing costs. The major onus for the past eight years has been on trying to have a functioning banking sector, one that is profitable and can stand on its own feet without needing the support of the taxpayer.

I should highlight that, notwithstanding the State's shareholdings in the domestic banks, the Minister for Finance has no direct function in their commercial decisions, including those that form part of the relationship between the banks and their customers. Decisions of this nature are matters for the banks' boards and management. The Minister has responsibility for the banks being run on a commercial, cost-effective, regulated and independent basis so as to ensure their value as assets to the State. Accordingly, it would not be appropriate for the Minister to intervene in actions taken by the banks in matters of this nature.

Relationship frameworks that define the nature of the relationship between the Minister and each of the banks have been specified. These frameworks are available on the website of the Department of Finance. In the case of Bank of Ireland, the State has a 14% minority shareholding. Notwithstanding this, officials in the Department have been provided with briefing material specifically by Bank of Ireland relating to developments in its branch network. I will provide the salient points.

The bank's customers are rapidly changing the way in which they bank - this is similar to the post office network - just as they are changing the way they buy goods or services online and communicate with one another. Only 3% of the bank's customers' total transactions are conducted over the counter, with 97% of all transactions taking place through other channels. Every month, the bank has 8 million interactions with customers via its mobile app and 14 million interactions through the mobile app, online banking and contact centres combined. In addition, the use of credit and debit card and contactless banking continues to grow, with demand for cheques, foreign currency and coin services continuing to reduce significantly.

The bank comments that, when it examines trends over time within a branch's catchment area and sees a consistent decrease in counter activity, it reconfigures the branch to support how customers are using it. This involves moving staff from behind the counter directly onto the floor where they can provide advice and assistance to customers, including in the use of self-service options. The bank advises that this change has been successful in a growing number of branches, where it has seen an increase in transactions happening in the branches through the enhanced availability of self-service options. The bank has highlighted that, in branches where staff move from behind the counter onto the floor, customers will continue to be provided with a comprehensive range of products and services, the ability to lodge and withdraw cash from easy-to-use self-service devices and access to online and phone services. The changes will also enable greater availability of branch staff to provide personalised financial and banking advice.

Foreign currency exchange and coin transaction services will no longer be available in these branches. If customers still require a counter service, the bank will introduce them to the branch of their choice locally.

Bank of Ireland has highlighted its retention of a strong nationwide presence of approximately 250 branches and 16 additional banking outlets. It maintains that it continues to improve its customer offerings and is investing €10 million in the branch network this year. It also maintains that it understands that business and retail customers increasingly require access to 24-seven facilities for lodgement and withdrawal.

Bernard Durkan (Kildare North, Fine Gael)
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I must ask the Minister of State to conclude.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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Can I take it that the rest of the response will be read into the record?

Bernard Durkan (Kildare North, Fine Gael)
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It will, but the Minister of State will have a chance to make a second response as well.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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Okay.

Eugene Murphy (Roscommon-Galway, Fianna Fail)
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I am happy with that and I know that the Minister of State will endeavour to give me an honest reply. I am not surprised with the answer that I have been given already. The Minister of State is right, in that the Government's part ownership of the bank is small and it cannot tell the bank what to do but, as a rural Deputy, he will realise that there is a larger problem. I presume that he runs constituency clinics. I happened to hold one last Monday in the town of Glenamaddy of "Four Roads to Glenamaddy" fame. It lost its bank some time back. Most of its people are served by Bank of Ireland in Castlerea, but they have received notice that business lodgements can no longer be made over the counter after 12.30 p.m. on a Monday or whatever, which is inconvenient. The bank will argue that business lodgements can be made through machines and that there will be a service. We could argue that back and forth.

The great community in Glenamaddy, including its business people and community leaders, has made the point to me that the removal of a bank from a town like Glenamaddy, Ballygar, Strokestown or Elphin creates a significant difficulty for the local economy. Banks are needed.

Maybe we have to start getting serious about post offices and credit unions. Yesterday, the bank insisted to me that it would not withdraw. I have to say that Bank of Ireland runs some good initiatives, for example, Enterprise Towns, and encourages people to get involved. Like the Minister of State, I have attended many such events. They are good but I fear that, if fewer customers attend a branch, we will be asking four or five years down the road what role the bank has.

As politicians, we all must get serious about having a banking system for rural towns and villages. Some good work is being done and some money is coming into communities, but we will lose out if we lose our banking services.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I will read the last paragraph of my statement into the record before responding directly. The bank has advised that the implementation of any change takes place on a phased basis in branches with a two-month period for comprehensive customer notification. Bank of Ireland has commented that it has a dedicated team committed to supporting vulnerable and elderly customers that provides additional support in the use of its digital and self-service options.

I acknowledge the Deputy's point about rural Ireland. I am surprised that we got a response to a Topical Issue debate from a commercial institution. There is a broader question about how we keep services in rural Ireland, whether that be via credit unions or post offices. Many have closed but, thankfully, many are still open. I believe the Government is actively considering how to create solutions in rural towns like those that the Deputy mentioned. Maybe I am wrong, but I understand that other financial institutions are in some of the towns in question, for example, Strokestown. In my county of Kilkenny, some of the mid-sized towns used to have both of the traditional main banks. In most cases now, however, one might be all that they have.

In some places there is no financial institution, which is a broader problem that must and will be addressed.

Eugene Murphy (Roscommon-Galway, Fianna Fail)
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I thank the Minister of State.

Bernard Durkan (Kildare North, Fine Gael)
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Our next participant is not here.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I believe the issue was withdrawn or deferred.

Bernard Durkan (Kildare North, Fine Gael)
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The Topical Issue was deferred or withdrawn.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I believe it was deferred.

Bernard Durkan (Kildare North, Fine Gael)
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We will then move on to the next item of business. Is the Minister of State taking the next item?

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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No, I am not.

Bernard Durkan (Kildare North, Fine Gael)
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Then we will suspend the House for a few minutes.