Vol. 536 No. 4
34 Mr. Bell asked the Minister for Finance if his attention has been drawn to the difficulties being experienced by public servants as a result of the refusal of banks to cash salary cheques; the discussions his Department has had with trade unions on this issue; the representations he has made to the banks on this matter; and if he will make a statement on the matter. [14225/01]
I am aware of the changes in procedures for cashing cheques introduced towards the end of last year by the Bank of Ireland and Allied Irish Banks.
My Department has had discussions with the two banks, which led to them modifying the new procedures as they apply to Government payments, and is in ongoing discussions with the trade unions about some local difficulties arising from this matter.
Bank of Ireland introduced new procedures with effect from 13 November 2000, which require, in general, that cheques must be lodged to an account rather than be fully or partially cashed over the counter. The bank's stated reason was that the changes were necessary to ensure the bank complies with accepted European banking practices.
As initially announced, the changes applied to all crossed cheques, cheques drawn on other branches and banks and third party cheques, but not to social welfare cheques, health board benefits where cheques are drawn on Bank of Ireland, and children's allowances.
In December 2000, Allied Irish Banks introduced similar procedures. However, having consulted my Department, AIB decided not to apply the restriction to Government payments, and it continues to cash payable orders drawn on the Paymaster General and those from Office of Public Works, which is the only Vote whose payments are not processed through the PMG.
Pending discussions with this Department, Bank of Ireland postponed the application of this restriction on payable orders drawn on the Paymaster General's office and on the Office of Public Works. Those discussions culminated in the bank introducing a modified form of the new procedures for Government payable orders. The main modifications were that the new restriction would not be applied to payments of pension to retired civil servants, teachers, gardaí and Army personnel and that, while other payable orders must be lodged to an account, the bank would not require that the customer wait for the normal clearance period of several days for access to the funds. The bank has committed to making the money available for withdrawal through an ATM by 9 p.m. on the day of lodgment, at the latest.
Bank of Ireland decided to operate the new procedures on this basis for PMG payable orders from mid-March, and for Office of Public Works orders from the end of March.
