Bank Charges

Questions (62)

Michael Fitzmaurice


62. Deputy Michael Fitzmaurice asked the Minister for Finance his views on the banks' charging of a €10 penalty when there is insufficient funds available in a current account to complete direct debit transaction; his further views that the imposition of such arbitrary and punitive penalties are especially unfair on the part of the bailed out banks in view of the cost of the bank bailout to Irish citizens and business alike, almost certainly contributed to the lack of funds in the first place; and if he will make a statement on the matter. [1937/15]

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Written answers (Question to Finance)

While all credit institutions in Ireland are independent commercial entities and I have no statutory role in relation to the charges applied by credit institutions, section 149 of the Consumer Credit Act 1995 requires that credit institutions, prescribed credit institutions and bureaux de change must make a submission to the Central Bank if they wish to introduce any new customer charges or increase any existing customer charges in respect of certain services. Section 149 does not cover interest rates rather it applies to fees and commissions only. The Central Bank may direct the institution not to impose the new or increased charge or it may approve the charge, or approve it at a lower level than requested by the institution. Once approved, the bank is entitled to impose the charge.

My Department published a report on the review of the regulation of bank fees and charges in December 2013. This contains a detailed description of the process by which the Central Bank makes decisions on whether or not to approve proposed charges. It is available on my Department's website at The following are the key findings of the review of the regulation of bank fees and charges undertaken by my Department:

- net fee and commission income divided by average assets in Irish banks was well below the average of their peers,

- net fees and commissions are lower in the Irish banks than in their European peers relative to net interest income,

- fee and commission income have become a more important source of income to the banks in recent years and banks have been able to increase fee and commission income since 2009 despite the restrictions imposed by section 149,

- Section 149 does appear to exert a restraining effect on the development of innovative products by the existing banks in Ireland but this may not be to the detriment of consumers,

- Section 149 may lead to inefficiency in pricing of financial products by the banks in Ireland, and

- Low customer mobility may mean that banks can increase prices without fearing a loss of customers.

The review also found that competition in the Irish banking sector has reduced significantly since the onset of the economic crisis and that this reduction is not related to Section 149. The review considered a number of possible changes to the existing regime but concluded that it would not be appropriate to repeal Section 149 at this point in time. The lack of competition in the banking sector means that the removal of section 149 would give unfettered price setting power to the incumbent banks. The Central Bank Supervision and Enforcement Act 2013 did introduce changes to Section 149 to attract new entrants to the Irish banking sector. There is some evidence of improvement in the banking sector with a number of institutions introducing new products and adapting their business model.

I would advise consumers who wish to compare current account offerings to look at  the Competition and Consumer Protection Commission  website at

Fuel Laundering

Questions (63)

Brendan Griffin


63. Deputy Brendan Griffin asked the Minister for Finance his views on ways of putting diesel launderers out of business; if he will review the current green diesel system, which provides enormous business potential for launderers; and if he will make a statement on the matter. [1979/15]

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Written answers (Question to Finance)

I am informed by the Revenue Commissioners that they are aware of the threat posed by diesel laundering and have implemented a comprehensive strategy to tackle the problem.  This strategy includes the following elements:

- The licensing regime for auto fuel traders was strengthened with effect from September 2011 to limit the ability of criminals to get laundered fuel onto the market;

- A new licensing regime was introduced for marked fuel traders in October 2012, which is designed to limit the ability of criminals to source marked fuel for laundering;

- New requirements in relation to fuel traders' records of stock movements and fuel deliveries were introduced to ensure data are available to assist in supply chain analysis;

- Following a significant investment in the required IT systems, a new supply chain reporting regime was introduced from January 2013, which requires all fuel traders to make monthly electronic returns to Revenue of their fuel transactions. Revenue is using this data to identify suspicious or anomalous transactions and patterns of distribution for investigation;

- Following a joint process with Her Majesty's Revenue and Customs in the United Kingdom, a new, more effective fuel marker was identified and will be implemented in the two jurisdictions from the end of March next; and

- Intensified targeting, in co-operation with other law enforcement agencies on both sides of the border, of enforcement action against suspected fuel laundering operations. 

In addition, I introduced a 'reckless trading' provision In Finance (No. 2) Act 2013 that makes a supplier who is reckless in supplying rebated fuel for a use connected with excise fraud liable for the duty evaded. This provision has strengthened Revenue's hand in dealing with those traders supplying fuel recklessly to dubious customers.  In Finance Act 2014, I introduced provisions to strengthen further Revenue's ability to refuse or revoke a mineral oil trader's licence where the trader does not comply with excise law, does not maintain adequate stock management systems and records, or provides false or misleading information. Revenue's strategy has already yielded significant results. Since mid-2011, 137 filling stations were closed for breaches of licensing conditions, over three million litres of fuel have been seized and 31 oil laundries were detected and closed down.  Industry sources indicate a much-reduced incidence of laundered fuel on the market and road diesel consumption and tax revenues are up 13% compared with a couple of years ago. Obviously, other economic factors have contributed to this growth but reduced fraud is an important factor.  It has been suggested on a number of occasions that the current system of marking lower taxed fuels should be replaced by one based on repayments to the users.  However, a change of this nature would impact on a wide range of users, would be costly to implement and would, itself, be at risk from fraud.  Marked gas oil has a wide variety of uses, including the propulsion of trains, in agricultural, construction and industrial machinery, for commercial sea-navigation (including fishing) and commercial and home heating purposes.  A change to a rebate system would involve the establishment of an expensive and wide-ranging repayments system and would place a new administrative burden on oil traders, on the large number of users and the Revenue Commissioners. It would also impose significant cash-flow costs on those currently using marked gas oil. Repayment schemes are vulnerable to abuse and the introduction of a wide-ranging repayment scheme would not offer greater security against fraud than the current arrangements.  Fuel in respect of which a repayment of duty was made could be easily diverted to on-road use.  

For these reasons, and in light of the progress made by Revenue in tackling the problem, I am satisfied that the strategy being implemented by Revenue is the best course of action. I am also confident that the introduction of the new marker here and in the United Kingdom from the end of March will reinforce the measures already implemented.

Banks Recapitalisation

Questions (64)

Brendan Griffin


64. Deputy Brendan Griffin asked the Minister for Finance his plans for 2015 to recover public moneys diverted to the banking system in recent years; and if he will make a statement on the matter. [1985/15]

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Written answers (Question to Finance)

As the Deputy will be aware the Irish banking system is now in a much stronger position than it has been in recent years. Profits are recovering, balance sheets have been restructured and we have started the process of returning cash to the taxpayer following the huge investments that were made over the 2009-11 period. 

The preliminary independent valuation of our shareholdings by the NTMA shows that as at 31 December 2014 our equity  and preference shares in AIB were valued at €11.7 billion and our 14 per cent equity interest in Bank of Ireland was valued at €1.4 billion. The State also holds €1.6 billion of convertible contingent notes in AIB and another €400 million of convertible contingent notes in PTSB (we have not independently valued our 99.2% equity interest in PTSB), which brings the total current value of the state's banking investments to more than €15 billion. This compares with €13.1 billion at end 2013.

Much of the banking-related work in the Department of Finance this year will focus on AIB. Given the scale of the State s investment some €20.8 billion and the range of options available to recoup value from the bank, officials within my department are working with AIB on reconfiguring its capital structure. Goldman Sachs International has been appointed to provide financial advice in this regard.

The focus will be on ensuring that the best decisions are made regarding potential capital restructuring options and sequencing in order to maximise the return of cash to the State from our AIB investments over time. While this is just the start of the process, it is an essential first step on the road to recovering value for the taxpayer. All options remain on the table and it is too early to specify what steps will be taken next or to put a timeline on decisions.

Tax Yield

Questions (65)

Brendan Griffin


65. Deputy Brendan Griffin asked the Minister for Finance if the level of revenue generated from oil, diesel and petrol in 2014 was lower than anticipated arising from the reduction in fuel prices towards the end of 2014, the predicted impact on revenue for 2015; and if he will make a statement on the matter. [1991/15]

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Written answers (Question to Finance)

I am informed by the Revenue Commissioners that there was no fall in Excise receipts in 2014 due to lower fuel prices. It should be noted that Excise is a fixed rate regardless of price.  I am also informed that the details on payments of VAT are not recorded in such a manner as would provide a basis for compiling the information sought by the Deputy.

The following table is a summary of provisional Excise receipts for 2014 and the original forecast for 2014. Overall the receipts are up €113m.











Excise - Light Oils (mainly petrol)





Excise - Other Oils (mainly auto-diesel)





Carbon Tax (Oils)










Economic Growth

Questions (66)

Brendan Griffin


66. Deputy Brendan Griffin asked the Minister for Finance the level of overall positive impact on economic growth predicted from the fall in oil, diesel and petrol costs; the measures that can be taken to maximise the positive impact of such declines; if it is expected that the lower prices will last throughout 2015; and if he will make a statement on the matter. [1992/15]

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Written answers (Question to Finance)

The price of Brent crude oil has fallen considerably since June 2014. For the most part, this is a positive development and is likely to have a favourable impact on real economic activity in Ireland.

As Ireland is a net energy importer, falls in oil prices have a positive impact in the short term. Lower energy prices reduce firms' input costs, thereby improving their profitability and  competitiveness. At the household level, lower energy prices are likely to lead to an increase in real disposable incomes, which can be used to reduce indebtedness or increase consumption on other goods and services.

A reasonable rule of thumb - everything else being equal - is that each sustained €10 per barrel reduction in the price of oil boosts the level of real GDP by between 0.1 and 0.2 percentage points.

It is also important to point out that the decline in oil prices will also reduce inflation.  At the level of the euro area, the latest figures show that inflation moved into negative territory in December for the first time since 2009.  Falling oil prices will further weigh on inflation in the short-term.  If expectations of falling prices were to become entrenched, the negative impact on the euro area economy could potentially be severe. 

For the purposes of  compiling my Department's macroeconomic forecasts, my officials make the purely technical assumption that Brent crude oil prices will move in line with futures prices. The latest forecasts, which were published for Budget 2015, included the assumption that the price of Brent crude oil in 2015 would be $103 per barrel.  Prices have fallen by close to 50 per cent since these macroeconomic projections were finalised in late September 2014. My Department will update its oil price assumptions in the next round of forecasting in April 2015. In the meantime, my Department willl continue to monitor oil price developments closely.

Banks Recapitalisation

Questions (67, 72)

Michael McGrath


67. Deputy Michael McGrath asked the Minister for Finance his views on comments by the Minister of State at his Department regarding a possible pro bono fee arrangement with the firm appointed to provide advice regarding capital restructuring and other related matters in relation to State investment in AIB; the fee structure that will be in place; and if he will make a statement on the matter. [2024/15]

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Michael McGrath


72. Deputy Michael McGrath asked the Minister for Finance the terms on which a company (details supplied) has been appointed by his Department in respect of the possible sale of AIB; if a contract has been awarded; if a competitive tendering procedure took place; and if he will make a statement on the matter. [2121/15]

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Written answers (Question to Finance)

I propose to take Questions Nos. 67 and 72 together.

As the Deputy is aware, within the past few days, I have awarded a contract to Goldman Sachs International to provide financial advice to the Department of Finance in relation to capital restructuring actions (and other related matters) with respect to the State's investments in AIB.

I can confirm for the Deputy that the duration of the contract is not fixed but is expected to run up to the summer of 2015. I can also confirm that Goldman Sachs International has been engaged on a pro bono basis. This is a good outcome for the State and we understand is not unusual internationally given firms desire to be associated with such high visibility government work. In fact a number of the tenderers offered their services on a pro bono basis. 

The award follows the establishment by the Department last year of three separate panels of financial advisers. These panels were put in place to principally facilitate the provision of timely advice in relation to our banking investments though the panels are available for the wider Department to use in other areas if deemed necessary.

The award of the current contract followed a competitive tendering process with each of the eleven firms on Panel 1 (which covers capital markets, strategic, M&A and restructuring advice) being invited to submit a tender. Prior to the year end, each of the firms accepted the invitation and the tendering process included face-to-face presentations by each of the firms to a panel of Department of Finance officials. Arising from these presentations, each of the firms was scored across a number of standard criteria with Goldman Sachs International being adjudged to have achieved the highest aggregated score. Accordingly, they were awarded the contract.

As I have indicated previously, no decision has been taken in relation to the State exiting any of its investments in AIB. What we intend to do during the first half of 2015 is make the bank's balance sheet fit for purpose and put together a roadmap that will see the bank start to return cash to the State. Upon completion of this work we will take stock of our options with respect to the future ownership of the bank.

Details of the firms included on Panel 1 can be found on the Department's website and I attach the following link for the benefit of the Deputy.

Credit Union Restructuring

Questions (68)

Michael McGrath


68. Deputy Michael McGrath asked the Minister for Finance the number of applications for credit union restructuring that are before the restructuring board; and if he will make a statement on the matter. [2025/15]

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Written answers (Question to Finance)

The Credit Union Restructuring Board (ReBo) has given approval to 12 restructuring proposals, involving 30 credit unions. Of these, 8 credit union mergers involving 20 credit unions have been completed to date. The remaining 4 proposals involving 10 credit unions are awaiting Central Bank approval and are due to complete shortly.

In line with the Commission on Credit Unions recommendation, restructuring is being carried out on a voluntary, incentivised and timebound basis. While ReBo has approved all current restructuring proposals, it is now actively engaging with a further 118 credit unions in the development of appropriate restructuring solutions. ReBo expects that many of these 118 credit unions will be involved in restructuring solutions in due course.

Consultancy Contracts Expenditure

Questions (69)

Michael McGrath


69. Deputy Michael McGrath asked the Minister for Finance the amount that has been paid to a company (details supplied) for professional services on the banking crisis since 2008, including any amounts, shown separately, paid by his Department, the Central Bank of Ireland, the National Treasury Management Agency and the National Pension Reserve Fund, or by the covered institutions themselves. [2026/15]

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Written answers (Question to Finance)

I have received the following information in relation to amounts paid to the company in question.

Department of Finance

There is no record of any payments to the company in question during the period.

Central Bank

The Central Bank has not paid for professional services from the firm mentioned, in the period 2008 to present.

National Treasury Management Agency and National Pensions Reserve Fund

In March 2010, the Minister for Finance delegated certain banking system functions to the NTMA.  The delegation was revoked, with effect from 5 August 2011, and the NTMA Banking Unit has since then been seconded to the Department of Finance's Shareholding Management Unit. At the direction of the Minister, certain costs of the Banking Unit (including costs incurred subsequent to the Banking Unit's secondment to the Department of Finance in 2011) continue to be met by the NTMA. Consultancy costs related to services provided by the firm in question incurred by the Banking Unit and met by the NTMA amounted to €7.717 million (ex VAT) as detailed as follows.


Service Provided

Amount €'m (ex VAT)

2010 - 2011

Advice in relation to Anglo Irish Bank


2011 - 2013

Advice on (i) liability management exercises and capital raising transactions in relation to Allied Irish Banks, Bank of Ireland, EBS Building Society, Irish Life and Permanent Group Holdings; and (ii) the sale of Irish Life.



Total Amount Paid


Covered institutions

The covered institutions would engage professional services on a range of issues and any amounts paid would be commercially sensitive.

Knowledge Development Box

Questions (70)

Michael McGrath


70. Deputy Michael McGrath asked the Minister for Finance the consultations underway by his Department and the Central Bank of Ireland; and if he will make a statement on the matter. [2027/15]

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Written answers (Question to Finance)

There is currently one public consultation open by my Department - the Knowledge Development Box Consultation Paper.

In line with the commitment contained in the Road Map for Ireland's Tax Competitiveness, which was published as part of Budget 2015, my Department launched a public consultation on the introduction of a new corporation tax incentive the Knowledge Development Box - on 14 January 2014. Interested parties are invited to submit their views on how the Knowledge Development Box should be designed to ensure that it meets the key objective of being the most competitive in class, within the agreed international parameters for fair tax competition in this area. The consultation will run for 12 weeks from 14 January 2015 until 8 April 2015.

Further details on this public consultation can be viewed in the consultation document which is available in the "Publications" section on my Department's website at the following link: The website also includes details of prior public consultations which have been closed for submissions.

In relation to the Central Bank, I have been informed by the Central Bank that the following is a list of public consultations currently active (accepting submissions):

- Review of the Code of Conduct for Business Lending to Small and Medium Enterprises

- Consultation on the Supervision of Non-financial Counterparties under EMIR

- Consultation on National Specific Templates for Insurers and Reinsurers under Solvency II

- Consultation on Regulations for Credit Unions on commencement of the remaining sections of the 2012 Act

I have been further informed by the Central Bank of the following public consultations which have been closed for submissions but the outcomes have not yet been published.

Macro-prudential policy for residential mortgage lending

Consultation on Fund Management Company Effectiveness-Delegate Oversight.

A list of active and closed Central Bank consultations can be found in the "Consultation Papers" section of the Central Bank website at the following link: