asked the Minister for Finance if he will ensure competition among the commercial banks in the matter of interest rates on overdrafts to industrial and commercial concerns; and if he will make a statement on the matter.
Ceisteanna — Questions. Oral Answers. - Overdraft Interest Rates.
55.
It is not proposed to take action to ensure competition in regard to interest rates on bank overdrafts to industrial and commercial concerns. This is only one aspect of lending business. There has been, in fact, a considerable development of competition between the commercial banks generally for such business, including to some extent competition in regard to interest rates, and I am satisfied that this development is likely to continue in the future. The Associated Banks hope to introduce term loans later this year. Under this system there will be a variety of interest rates related to the purpose of the loan, the risk involved and the standing of the borrower.
56.
asked the Minister for Finance the commercial bank overdraft rate operating as at 1st June in England and in Ireland; and if he will make a statement on the matter.
I understand that the overdraft interest rates charged by the London and Scottish clearing banks on 1st June, 1971, ranged from 7 per cent to about 9½ per cent. The lower rate applies only to nationalised industries, export credit and a relatively small number of first class customers. The rates applied by the Associated Banks in the State at that date ranged from 8½ per cent to 9½ per cent. The lower rate applies to agriculture, mining, construction, manufacturing, distribution and non-financial services. An export credit rate of 7 per cent for capital goods exports will be introduced as soon as arrangements are finalised.
Would it be in order to ask the Minister what interest rate is paid on the Central Bank deposits in London? We have £98.2 million, have we not?
The holdings of the Central Bank vary, of course, from country to country and even in Britain. They do not all give the same yield. I am afraid I would require notice of that if I were to give any details.
Will we be altering our place of deposit when we enter the EEC?
I think that question is coming up on another day.