Written answers

Wednesday, 3 March 2021

Department of Finance

Strategic Banking Corporation of Ireland

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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222. To ask the Minister for Finance if he will respond to concerns raised by a person (details supplied) in respect of their difficulties accessing vital loans through the Strategic Banking Corporation of Ireland, SBCI, scheme with the reasons for refusals being that their business operates in the motor industry sector; and if he will make a statement on the matter. [11958/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, one of my main concerns and that of Government is to ensure that SMEs have access to sufficient liquidity, and that access to credit for viable SMEs is maintained. A range of supports have been put in place to support businesses including the Covid-19 Credit Guarantee Scheme which is operated by the SBCI on behalf of the Department of Enterprise Trade and Employment.

However, as Minister for Finance I have no role in the day to day operations of any bank operating within the State, including banks in which the State has a shareholding. Accordingly, I'm precluded from intervening on behalf of any individual customer in any particular bank.

Decisions in relation to commercial matters are the sole responsibility of the board and management of the banks which must be run on an independent and commercial basis. The independence of banks in which the state has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market. The Relationship Frameworks for BOI can be found at the following link: BOI: .

Regulated financial service providers that offer credit to SMEs are required to comply with the Central Bank (Supervision and Enforcement Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015, which are generally refe rred to as the SME Regulations. These set out the required treatment of SMEs by regulated entities in relation to various aspects of business lending. This includes detailed provisions around the credit application process, requirements regarding security or collateral, credit refusals and withdrawals, handling complaints, managing arrears and having in place policies for engaging with SMEs in financial difficulty.

The SME Regulations also specify that borrowers must be informed about a regulated entity’s internal appeal process in respect of a decision on whether to grant credit. The SME Regulations also state that borrowers with participating lenders should be informed of the Credit Review Office where the participating lender’s decision in relation to alternative arrangements are subject to review by the Credit Review Office. The Credit Review Office () was established to assist those SMEs and farm borrowers that have had credit applications of up to €3 million refused or have an existing credit facility withdrawn or amended by the participating bank or in relation to alternative arrangements for borrowers in difficulty. SMEs can apply to Credit Review after exhausting the internal appeals process in the relevant participating institution, which are currently AIB, BOI, Ulster Bank and Permanent TSB.

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