Vol. 251 No. 2
asked the Minister for Finance if any directive was given by the Government to the Central Bank or any other Government agency regarding (i) overdrawn accounts or (ii) the restriction of credit; and if he is aware that many firms and organisations are in difficulties owing to the long bank strike and that hardship and unemployment for unfortunate people are ensuing; and if the Government will recommend to the banks action to minimise the problem.
52.
asked the Minister for Finance what steps he proposes to take to mitigate the hardship caused to traders, who kept money in circulation during the bank strike and now find they are debited large sums owing to cheques returned refer to drawer, and if he will make a statement on the matter.
53.
asked the Minister for Finance what steps he proposes to take to ensure that industries, which are experiencing credit difficulties owing to the severe credit restrictions imposed by the banks since the finalising of accounts after the bank strike, will be able to stay in business; and if he will make a statement on the matter.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 51, 52 and 53 together.
There is no question of a directive having been issued by the Government to the Central Bank or any other Government agency regarding overdrawn accounts or the restriction of credit on such accounts.
I have been in touch continually with the Central Bank, and through it with the Irish Banks' Standing Committee, as regards the banking and credit situation generally. It must be appreciated that there was a vast accumulation of work over the many months during which the banks were closed and that the task of bringing banking records up to date has been a long and tedious one.
It was to be expected that some difficulties would arise in the course of this unprecedented operation but various reports on the subject have been exaggerated and have given rise to undue public concern. I have found no reason to believe that credit conditions applied following the re-opening of the banks have affected business or employment in any significant way.
The extent of overdraft accommodation to individual private businesses and customers following the re-opening is a matter between them and their banks. The banks have stated that any case of difficulty will get a sympathetic hearing on an approach being made to the bank manager by the firm or person concerned. I am assured that persons having a genuine case will be dealt with reasonably.
Is the Minister aware that firms and some private individuals were informed by the banks that they had to clear their accounts within a limited number of days? This happened even though the debit on the account was caused by the fact that cheques which were submitted were uncleared because of a delay in another bank possibly in the same town. Has the Minister not had representations made to him on that basis by some of the people concerned?
I have had representations made in regard to a number of cases where that kind of thing was alleged. In no case I have investigated has it turned out that that has been the position. What the Deputy has described has been the position but, in addition, in every case which I have investigated, there was a situation in which people had gone over their credit limit, apart from the fact that cheques which they had lodged were RD'd or not cleared. I have not yet come across any case which answers the description given by the Deputy. There are some which I am investigating at present in which the same allegation is made and which may turn out to be such but none that I have investigated as yet has turned out to be such.
In view of the long delay which occurred as a result of the bank lockout would the Minister not agree that the banks should now, as a matter of goodwill to their customers, decide to give a reasonable time to clear up the accounts which they claim are overdrawn?
I would agree with that, but I am aware of a number of cases where the banks have acted in this way. I am not saying there are no cases in which the banks have acted unreasonably, but I have not come across them. I am investigating the complains I get and the banks have assured me that they are not acting unreasonably. If I find they are, I will take action.
The Minister must have read about the closing of firms which is the result of this.
No, I have not found any such case. I have seen allegations to this effect, which is somewhat different.
Will the Minister state what directives were given by the directors of the various banks to their managers prior to the 15th January? Will the Minister also state the number of firms that have been placed in jeopardy by this directive?
I am not aware of the content of any directive which may have been issued by the directors to the managers of their branches other than the details I have given in the reply, which were details furnished to me by the banks about their general approach to this problem. Consequently, I am not in a position to say how many firms, as the Deputy said, have been placed in jeopardy as a result. I would repeat that any case I have investigated has not turned out to be in the category referred to by Deputy Tully and referred to frequently in newspaper reports.
In view of the chaos and the distress in many cases caused as a result of the bank strike is the Minister any more sympathetic to the proposal to set up some form of post office Giro system so that should this happen again we would have an alternative banking system?
That is a separate question.
It is a matter to which consideration is being given.
