Sandra McLellan (Cork East, Sinn Fein)
Link to this: Individually | In context

Question 158: To ask the Minister for Finance the reason there are no regulations in place regarding social welfare cheques being cleared (details supplied); and if he will make a statement on the matter. [3901/12]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

I understand that there are no particular requirements in place regarding the clearing of social welfare cheques. The Irish Paper Clearing Company Limited (IPCC) is responsible for the clearing and settlement of cheques in Ireland. The IPCC system provides the mechanism through which the participating banks exchange funds to honour cheques written by their customers, both corporate and individual. The 'Rules for Clearing' issued by IPCC govern the process whereby these payment instruments are exchanged for value between participants; the rules also govern the processes for dealing with unpaid items and for rectifying errors.

The clearing cycle for cheques drawn on other banks, or on other branches of the same bank, is normally three business days. However, it should be noted that in some circumstances (in particular, where the payer's and payee's accounts are with the same branch of the same bank) the clearing cycle can be shorter than this. There may be a shorter clearing period for social welfare cheques presented at Bank of Ireland branches as these cheques are drawn against the Department of Social Protection Bank of Ireland accounts. Any bank or financial institution outside of the IPCC framework may have a longer cheque clearance cycle. A list of IPCC participants is available directly from IPSO at www.ipso.ie .

As to the related matter of when a bank will permit a customer to draw against a cheque lodged to his or her account, this is a matter for decision by each bank based on its own risk management arrangements, and would be outlined in the relevant terms and conditions. I should note that this question also highlights the disadvantages of the continued high usage of cheques as a method of payment. Greater use of electronic payment transactions have the potential to achieve significant savings for individual businesses; in particular electronic payments processing can realise significantly improved efficiency and improvements in the quality of customer service.

Under the European Communities (Payment Services) Regulation, 2009, (S.I. 383 of 2009), electronic payments are subject to maximum time limits for the transfer of funds between accounts. From 1 January 2012, a payment must be credited to the account of the payee ́s bank no later than the end of the next business day. I also refer the Deputy to the answer to Question No. 128 of 11 January 2012 relating to Central Bank proposals to prepare a National Payments plan to secure a decisive shift to electronic payments resulting in a reduced usage of cash and cheques in Ireland.

Pearse Doherty (Donegal South West, Sinn Fein)
Link to this: Individually | In context

Question 159: To ask the Minister for Finance if he will confirm that KBC bank has not yet passed on the ECB interest rate drop of 14 December 2011 to its residential mortgage customers here; if he will confirm that KBC has yet to inform its customers whether it intends to pass on this rate reduction; his views that the actions of KBC are acceptable; the course of action he will take on this matter; if he has had any contact with either the Financial Regulator or KBC bank on this matter to date; and if he will make a statement on the matter. [3915/12]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

The lending institutions in Ireland are independent commercial entities. Ultimately the pricing of financial products, including standard variable mortgage interest rates, is a commercial decision for the management team and board of each lending institution, having due regard to their customers and the impact on profitability, particularly where the cost of funding to each lending institution, including deposit pricing, is under pressure. Neither the Central Bank nor I have any responsibility for the variable mortgage interest rate charged by the financial institution mentioned by the Deputy. I have no powers to compel the institution to reduce its rates. The Deputy will be aware of the Central Bank's Code of Conduct on Mortgage Arrears, a copy of which can be accessed on www.centralbank.ie .