Written answers

Wednesday, 17 May 2023

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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43. To ask the Minister for Finance if funding from the banking levy could be used to assist in ensuring a network of bank branches throughout the country, in view of the major loss of such facilities in many towns particularly affecting rural communities; if he will give detailed consideration to proposals (details supplied); and if he will make a statement on the matter. [23597/23]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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In relation to the broader issue raised by the Deputy, the bank branch network has reduced in recent years, as the landscape for the provision of banking services has evolved. In light of this changing landscape, my Department completed a broad-ranging review of the retail banking sector. Its final report was published in November 2022 and is available on the website of the Department of Finance.

Access to banking services, particularly the ability to withdraw and deposit cash, was a key issue identified by the Review and a number of recommendations address this issue. The Review also includes recommendations in relation to access to branches which the Central Bank should address under the Consumer Protection Code. These include: 

  • Requiring banks to submitboard approved assessments to the Central Bank when they are planning tosignificantly alter branch services, or when planning to close branches;
  • Requiring banks to conductex-post assessments, to include a customer survey, after the change orclosure and a requirement to rectify material issues; and
  • Increasing the notice period from one to four months for significant change, and from two to six for branch closures.
The Review also outlined the important role that An Post and the credit union sector play in providing access to financial services across the State.  With regard to the latter, it highlighted that the credit union sector is well placed to provide even more competition at scale given the strength of its brand and locations across the State.

The implementation of the recommendations that are directed at the Department of Finance are being carried out for the most part as part of normal policy and legislative work. A dedicated team has been put in place and commenced work on the issue of Access to Cash specifically, and that team is currently in its research phase to develop legislation and prepare heads of bill.

The Central Bank is currently undertaking a major review of the Consumer Protection Code and the outcome of this significant piece of work is likely to address several of the recommendations.

It is also crucial that the retail banking sector ensures the interest of consumers are a priority in their organisations and seek to work together, where possible, to deliver the best outcomes for the economy and citizens. The retail banking sector has been contacted regarding their role in carrying out those recommendations which fall to them.

In relation to the use of funding from the Banking levy, the banking levy as provided for in section 126AA of the Stamp Duties Consolidation Act 1999 (SDCA 1999) under the heading “A further levy on certain financial institutions”, is due to expire this year, with the final payments under it by the liable institutions due to be paid to Revenue in October 2023.

With its pending expiry, and in order to allow me to make a fully informed decision on its future in advance of Budget 2024, a full review of the levy is currently taking place.

Work on that review has included a public consultation that ran between 7 April and 5 May. The submission made to that consultation, which the Deputy references, is noted and will be reviewed as part of that process.


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