Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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110. To ask the Minister for Finance his plans to address the diminution of banking services in rural areas; and if he will make a statement on the matter. [30682/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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I should stress at the outset that the Government has no formal role in the commercial decisions of the banks as to their future business model and whether or not they will close particular branches.

The Deputy will no doubt appreciate that the provision of services by banks, including the location of branches, is a commercial decision for the Boards and management of the institutions.

That said, I expect that any bank closing branches will do everything that it can to mitigate the impacts of the branch closures on local communities, including technology and the use of alternative means of service delivery. I also expect that the bank will ensure that customers are kept informed about developments and provided with the appropriate assistance to move branches, switch to other banks and avail of alternative means of accessing financial services. The Central Bank will also have a role in ensuring that consumer protection rules are followed.

As the Deputy will be aware, the Report on Local Public Banking by my Department and the Department of Rural and Community Development has now been published.

Specifically, the Report examined a proposal from Irish Rural Link and the Savings Bank Foundation for International Cooperation for 8-10 local public banks, starting with a pilot local public bank in the Midlands. The suggested locations in the proposed pilot in the Midlands are already serviced by existing banks, credit unions and post offices.

The Report concludes that there is not a compelling case for the State to establish a new local public banking system in Ireland using €170 million of Exchequer funds, based on the proposed model. However, as set out in the Report, my Department will commission an independent external evaluation of other possible ways in which the objectives of local public banking, such as financial inclusion and economic development of rural areas, could be furthered in Ireland.

Furthermore, the Government is committed to continuing to engage with interested parties and stakeholders, including those representing rural areas, on this issue by way of a stakeholder forum.

The Report also highlights the positive contribution of An Post and credit unions to the Irish banking environment. There is a commitment to continuing to work with An Post and the credit unions in relation to the development of the provision of financial and banking services by them, particularly in rural areas. My Department has been engaging with Minister Naughton’s Department in this regard.

The Deputy will be aware of the Strategic Banking Corporation of Ireland (SBCI) whose mission is to deliver to Irish SMEs effective financial supports that address failures in the Irish credit market, while supporting competition and innovation and ensuring the efficient and effective use of available EU resources.

The SBCI does not engage in direct lending. It utilises an on-lending model, making finance available through both bank and non-bank partner finance providers, known as on-lenders. It is also developing a further of risk-sharing-counter guarantee schemes, such as the Agricultural Cashflow Support Loan Scheme and the Brexit Loan Scheme.

The SBCI began lending in March 2015. To the end of December 2017, SBCI supported funding of €920m has been provided to 22,962 SMEs supporting 119,392 jobs. Of specific relevance to this question is that approximately 85% of SBCI supported lending has gone to SMEs based outside Dublin.