Dáil Éireann Debate, Tuesday - 28 September 2021
291. Deputy Claire Kerrane asked the Minister for Finance the processes that are in place to enable businesses in Ireland to use online banks which are based overseas with ease; if there are mechanisms in place to remove barriers to businesses banking with online banking systems outside Ireland and to ensure governance in this area remains transparent and customer friendly; and if he will make a statement on the matter. [46627/21]
View answerUnder EU law, credit institutions in EEA Member States only need to seek authorisation to provide services in one member state which is referred to as the Home Country Supervisor (in Ireland, the Central Bank). Authorisations are then valid for the entire EU, under the principle of single authorisation. Passporting of services and activities is made possible as the standard of regulation and supervision of passporting firms is effectively the same throughout the EU. The Central Bank is notified in advance by the Home Country Supervisor of the activities which will be conducted. However, supervisory responsibility remains with the Home Country Supervisor.
It is a matter for each individual institution authorised elsewhere in EEA whether it chooses to passport its services into Ireland or not.
Banks from non EU countries can operate within the EU in two different ways. They can establish a subsidiary in an EU country and then passport across the EU like other Banks or they can to open ‘third country branches’ in the EU countries where they wish to operate. There is limited harmonisation of rules on third country branches on an EU level and it is usually the case that third country branches are confined to the member states where they are established.
Any firm operating in Ireland under EU passporting rules must use a regulatory disclosure statement, indicating the EU country where it has been authorised but highlighting that it is regulated in Ireland for conduct of business rules. In this regard, the Deputy may wish to note that SME borrowers in Ireland have regulatory protections via the Central Bank's SME lending regulations.
The SME Regulations, centralbank.ie/news/article/regulations-for-firms-lending-to-smes-from-2016, set out the required treatment of SMEs by regulated entities in relation to various aspects of business lending. This includes detailed provisions around the credit application process, requirements regarding security or collateral, credit refusals and withdrawals, handling complaints, managing arrears and having in place policies for engaging with SMEs in financial difficulty.
