Dinny McGinley (Donegal South West, Fine Gael) | Oireachtas source

I thank the Senator for raising this matter. Being from a rural background I understand her concerns very well. Unfortunately, a number of bank branches are being closed in my constituency as well.

As the Senator will be aware, operational decisions for the covered banks - AIB, Bank of Ireland, Irish Bank Resolution Corporation, IBRC, and Permanent TSB - remain the responsibility of the boards and management of the institutions. Notwithstanding the fact that the State is a significant shareholder in these institutions, we must ensure that the banks are run on a commercial, cost-effective and independent basis to ensure the value of the banks as an asset to the State. The relationship frameworks between the Minister for Finance and each bank define the nature of the relationships with those banks as per the memorandum on economic and financial policies agreed with the EU Commission, the European Central Bank, ECB, and the International Monetary Fund, IMF. These frameworks were published on 30 March 2012 and can be found on the Department of Finance website. Likewise, the State has no control over operational decisions made by the non-covered institutions operating in the State.

As the Government has stated previously, it is an inevitable but unfortunate consequence of the necessary restructuring of the banking system, and return to viability of the sector, that branches in certain towns and villages across the country will be closed. Each branch is looked at on an individual basis regarding income and costs. Banks also assess the level of usage of each branch in the decision-making process. Other factors affecting the decision may include whether the premises is owned or leased. The Government appreciates that any branch closures will have an impact on the affected towns and villages. However, it is an inevitable consequence of the cost cutting programmes currently being undertaken across the banking sector.

Nevertheless, to mitigate the impact of the branch closures on customers, both AIB and Danske Bank have developed a relationship with An Post that allows customers to perform a range of banking functions in their local post office. In the case of AIB, additional banking facilities are available in over 90 selected post office outlets in areas affected by branch closures. AIB has also launched a new mobile bank service to provide certain banking services to customers in remote locations.

All the banks are keen to embrace new technologies to enhance the customer experience and there has been increased investment in new and innovative ways for people to bank. The availability of Internet and telephone banking along with mobile and iPad applications allows customers the opportunity to perform banking transactions outside traditional hours. It is now possible for customers to access banking services 24 hours a day and 365 days a year.

The Government is committed to the development of rural areas and supports this commitment with resources that aim to diversify the rural economy and improve the quality of life in rural areas. Programmes managed by the Department of the Environment, Community and Local Government, such as the rural development programme and the local and community development programme, continue to provide the financial resources necessary to support both economic and community activity in rural Ireland, thereby laying strong and sustainable foundations for vibrant rural communities for the future. The Government is committed to the roll out of broadband services to rural Ireland and will ensure that all customers can avail of the full range of new innovative services provided by the banks.