The Central Bank is responsible for imposing and subsequently regulating the compliance of credit institutions with conditions imposed on their respective licences. As such it is not the role of Government to review licence conditions imposed by the Central Bank in its regulatory capacity. I have been informed by the Central Bank that it does not comment on the individual licence conditions imposed on specific credit institutions and that once a licence is issued it becomes the property of the relevant credit institution and thus the Central Bank retains no right to publish copies. However, pursuant to Section 12(1) of the Central Bank Act 1971, the Central Bank publishes a register of licensed institutions on its website.
The Central Bank does not impose any general restrictions on foreign credit institutions operating in Ireland, however, the Central Bank has the power to impose specific licence conditions on any domestic or foreign credit institution licensed to operate in Ireland.
Section 7 of the Central Bank Act 1971 (as amended) provides that ‘Subject to the provisions of this Act, a person, other than a Bank, shall not, in or outside the State, carry on banking business or hold himself out or represent himself as a banker or as carrying on banking business or on behalf of any other person accept deposits or other repayable funds from the public, unless he is the holder of a licence'. Under section 58 of the Central Bank Act 1971, contravention of section 7 is an offence.
In the event of a customer being affected by a credit institution operating in breach of regulatory requirements, that customer has in the first instance the option of seeking redress from the institution in question. Failing that or if the customer is not satisfied with the outcome, there is the option of bringing the dispute to the Financial Services Ombudsman or the Courts. Whether or not the customer is successful in securing redress for any loss suffered would depend on the circumstances of the case.
I would like to inform the Deputy that I propose to shortly bring forward amendments at Committee Stage of the Central Bank (Supervision and Enforcement) Bill which will introduce greater clarity for customers seeking compensation for losses arising from the failure of a credit institution to comply with its obligations.
Failure to comply with the conditions of a banking licence could result in administrative sanction by the Central Bank. The Central Bank (Supervision and Enforcement) Bill 2011 provides that such a sanction may include suspension or revocation of a banking licence.
Section 11 of the Central Bank Act 1971 sets out the grounds for revocation of a bank licence including if the holder becomes unable to meet his obligations to his creditors or suspends payments lawfully due.