Matt Shanahan (Waterford, Independent)
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2. To ask the Minister for Finance the steps that he and his Department are taking to provide further consumer choice to the Irish retail banking sector particularly with the exit of two banks (details supplied) from the domestic market; and if he will make a statement on the matter. [31004/22]

Matt Shanahan (Waterford, Independent)
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My question relates to the steps the Minister of State and the Department are taking to provide further consumer choice in the Irish retail banking sector, especially with the exit of the two main banks.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I thank the Deputy for raising this issue because it is one that affects hundreds of thousands of people, especially since Ulster Bank announced its withdrawal from the Irish market as part of the NatWest group, and KBC has announced likewise. The retail financial services sector is going through a major period of change. In the past year, we have seen a number of announcements from the main retail banks regarding their operations in the State, including reductions in the branch network throughout the country. While decisions relating to the business models of regulated firms are commercial matters for the boards of those organisations, the Department of Finance, the Minister and the Central Bank cannot interfere with those commercial decisions. We can, however, ask them to ensure a consumer-focused approach is their top priority when dealing with affected customers.

On the specific issue of the banks leaving the market, the Minister, officials and I met with a range of providers of retail banking services last month, particularly in respect of current accounts, including the remaining banks, An Post and credit unions, to discuss what they will do for impacted customers. The Irish retail banking system is concentrated by international standards but that does not necessarily mean competition does not exist between those particular players. The changes that have recently taken place in the Irish retail banking sector are a reflection of the wider challenges the banking sector is facing, not only in Ireland but abroad, and because of these changes the Minister has instructed the Department to undertake a broad-ranging review of the retail banking sector.

The issues raised by the Deputy will be considered by the review currently under way as part of this work in assessing the current landscape for the provision of retail banking services in Ireland and its likely evolution over the coming years. The team will also look at the size and structure of the sector in Ireland and similar-sized open economies in the EU and OECD. That report will be published later this year.

Matt Shanahan (Waterford, Independent)
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As the Minister of State outlined, KBC and Ulster Bank are leaving the Irish market and because of that approximately 900,000 account holders need to find a new home. That process is ongoing, to a degree, but it is causing a lot of anxiety for people. Some of those customers have left the banks they are now going back to, possibly because of disputes over a number of years or when they were refused credit, and now find their choice has been reduced. The Minister of State spoke about the accommodative actions the existing banks are providing for new accounts but it is probably a fact now that Ireland's regulatory regime is not attractive to new entrants. Our major problem is the lack of choice in the banking sector.

I ask the Minister of State to refer quickly to processes that might be undertaken to allow An Post and the credit unions to compete more favourably in the Irish banking market, particularly at the retail end.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I hear what the Deputy said about the regulations not being conducive but it is all about providing financial services. Every single financial service provided in Ireland does not have to be provided by a regulated body in Ireland. Such a body can be regulated in any EU country and provide services in Ireland. For example, and I do not want to overemphasise it, there are 1.6 million Revolut account cardholders in Ireland today. That is very significant. Notwithstanding the narrowing of the banking structure, changes are happening. There is an increasing range of banking and financial services available to customers who choose those products.

I will say to customers of the two institutions that are leaving to be proactive and start opening their accounts in their new financial institution as soon as possible. I encourage people to go to the credit unions and An Post. The latter opened 30,000 new current accounts in the first three months of this year. The credit unions are already in situin some of those banks that are leaving, in particular, Ulster Bank. The local credit unions have stands there a couple of days a week. I met several credit unions whose staff have moved in so when people come to their bank, the local credit union has a stand in the premises and branches that are scheduled to close. I ask people to be proactive and not wait until the last minute.

Matt Shanahan (Waterford, Independent)
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The retail banking sector is very important but what most people are now concerned about is access to finance and access to credit, especially if they are in the construction and manufacturing sectors and, in particular, the agricultural sector at present. There are major headwinds in those areas in terms of where people can go to access finance. That is a big problem. I accept that Revolut is in the market here for retail services, but is there anything the Department can do to put pressure on the system or to bring in legislation to allow people to access funding from eurozone banking? At the end of the day, we are members of the EU and yet we are excluded from any accessing of European banks. It is very difficult, unless you are a large-scale conglomerate, to try to access funding for large-scale project work. Those that can are well able to do it but smaller manufacturers, and the farming sector in particular, now have very limited options to access funding.

Seán Fleming (Laois-Offaly, Fianna Fail)
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On the farming sector, the Deputy mentioned credit unions. As he knows, they have a very good product called cultivate. Several credit unions in all the provinces provide that scheme, which provides 50,000 unsecured loans to farmers. It may not be a lot in the context of the scale of some farming activity, but it is quite significant for many farmers. That is an important source of new finance in that sector.

I also say to people that the Central Bank is most keen on, and the Minister and the Central Bank are both stating this, the importance of the closure of these institutions in Ireland being conducted on an orderly basis. Generally, people will have six months to close their accounts and open new accounts when they get the relevant letters. I ask people to be proactive and not wait until the last minute. The Deputy knows we cannot stop the banks leaving Ireland. We have AIB and Bank of Ireland and I definitely believe that with NatWest, which is also investing in Permanent TSB and taking a 20% stake in it, we will have three major banks operating in Ireland in the immediate future, one of which, Permanent TSB, has significant State investment.