Gerald Nash (Louth, Labour)
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184. To ask the Minister for Finance his views on the opinion of the Governor of the Central Bank that the retail banks are not ready to cope with the additional workload that will result from the exit of banks (details supplied) from the Irish banking sector; his views on whether it was a mistake for the two banks in question to proceed having full knowledge of same; and if he will make a statement on the matter. [21647/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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While it is regrettable that Ulster Bank and KBC have decided to exit the Irish market, as Minister for Finance, I have no role in the operational matters of any bank in the State. Decisions in this regard are the sole responsibility of the board and management of the banks, which must be run on an independent and commercial basis.

The withdrawal of KBC and Ulster Bank is a challenge facing consumers and SMEs as they need to switch their current and other accounts to new providers. It is important that the Irish banking sector rises to this challenge.

Both the Central Bank and I expect all retail banks to have plans in place to manage the impact of the broader changes and consolidation in the retail banking sector in Ireland. It is the responsibility of the individual banks to ensure that they are putting their customer first, ensuring fair treatment of customers and that customers understand what the changes mean for them.

This week the Central Bank wrote to the CEOs of the five main retail banks to set out its expectations on some key items related to the account migration process. The purpose of these letters is to reinforce and, to any extent necessary, clarify the application of the expectations set out in the Central Bank's previous letter of June 2021 and to invite the CEOs to a roundtable meeting, hosted by Director General, Financial Conduct, Derville Rowland on the following five key issues/risks:

- Notice periods

- Application of the switching process

- New providers making commercial decisions in a manner that facilitates a customer making and executing a switch

- Direct debit originators and/or other service providers

- Vulnerable customers

All customers that currently have an account with KBC Bank and Ulster Bank will be notified by their respective bank, with sufficient notice, to switch their accounts and how the banks will assist them to do this.

However, customers do not have to wait for their banks to contact them and could decide at an earlier stage to move to alternative providers, in advance of any notice period. Where customers are considering switching in advance of the notice period, they should make contact with their current provider before closing their account to ensure they understand any product benefits that may be related to their existing current account.

In terms of the preparedness of the remaining banks, the Banking and Payments Federation of Ireland (BPFI) has advised that the industry is resourcing up significantly and that over 100,000 accounts have been opened at the three remaining retail banks so far this year. The Department of Finance is engaging with the BPFI on an ongoing basis to ensure that the industry is responding to the challenge appropriately. 

Officials are also meeting representatives from other financial service providers that offer current accounts to discuss how they can support customers opening new accounts because of the withdrawal of both Ulster Bank and KBC.