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Dáil Éireann debate -
Thursday, 7 Jul 1983

Vol. 344 No. 9

Written Answers. - Bank Facilities.

502.

asked the Minister for Finance if he is aware of suggestions that the decision of the Irish banks to stop returning cancelled cheques to customers will provide opportunities for tax evasion and could facilitate fraud; and if he will make a statement on the matter.

503.

asked the Minister for Finance if the Irish banks consulted with him or with the Central Bank regarding their decision to stop returing cancelled cheques to customers; and if he or the Central Bank approved such a change.

504.

asked the Minister for Finance if he is aware of the changes proposed by the banks in regard to the return of customers cheques; and if he proposes to take any action on the matter.

505.

asked the Minister for Finance if he will ensure that no system of cheque truncation is introduced by the banks until such time as they are in a position to provide detailed bank statements showing the names of the payees etc, and if he will ensure that adequate safeguards are built into the system to minimise the danger of fraud, tax evasion etc.

I propose to take Questions Nos. 502 to 505, inclusive, together.

I am aware that the Associated Banks propose to discontinue the practice of returning paid cheques to customers and that two banks are introducing the new arrangement at two centres on a phased basis. I regret that neither my Department not the Revenue Commissioners were consulted before this change was announced. The implications for the proper collection of the revenue are being pursued with the Irish Banks' Standing Committee.

The Central Bank has informed me that it was consulted and agreed to the new practice after receiving certain assurances from the banks. These are that all customers' paid cheques, or photocopies, will be retained for at least six years and will be available to customers at bank branches on request and at no extra charge. In cases of genuine need the banks will arrange for the return of cheques to customers. The Central Bank has advised me that the introduction of cheque truncation, that is the holding of paid cheqes at the branch of presentation rather than at the customer's branch, does not arise at this stage. The new cheque retention arrangements are being brought in gradually and will be monitored to ensure they are working satisfactorily, before further developments would be considered.

The Central Bank has also advised me that it is keeping the general situation under review and has informed the banks that it wishes to be consulted on all future developments. While I welcome measures aimed at improving efficiency and controlling costs I am concerned that their implementation should not facilitate tax evasion or fraud. As I have indicated, this aspect is being followed up.

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