Dáil Éireann Debate, Tuesday - 6 October 2015
280. Deputy Marcella Corcoran Kennedy asked the Minister for Finance if Allied Irish Bank and Bank of Ireland, in order to meet their contractual obligations with the Strategic Banking Corporation of Ireland, must apply a minimum or maximum percentage reduction on business loan interest rates to small and medium enterprise applicants; and if he will make a statement on the matter. [34593/15]
View answerThe Strategic Banking Corporation of Ireland (SBCI) launched its first product programme on the 19th February 2015 and lending commenced on the 9th March 2015 through two On-Lending Partners, Bank of Ireland and Allied Irish Bank Plc.
An initial sum of €400m has been allocated between Bank of Ireland and AIB for lending to SMEs. The SBCI provides the same low cost pricing of funds to all its On-Lending Partners. While the On-Lending Partners may use different pricing approaches, the SBCI ensures that the financial advantage of the lower cost funding obtained by the On-Lenders is fully passed on through the SBCI loans provided to eligible SMEs.
The SBCI's on lending partners commit under the terms of their facility agreements to pass on the financial advantage arising from the discounted funding provided by the SBCI to their SME clients.
The SBCI operates detailed monitoring processes to ensure that the full financial advantage is passed on to SMEs. The SBCI places no maximum on the discount to be passed on to SMEs and On-Lending institutions are free to discount further the rates they offer to SMEs.
