I propose to take Questions Nos. 57, 58 and 65 together.
As the Deputy will be aware the Relationship Framework with the bank provides that the State will not intervene in the day-to-day operations of the bank or their management decisions. These frameworks are published on the Department of Finance website. I must ensure that the bank is run on a commercial, cost effective and independent basis to ensure the value of the bank as an asset to the State, as per the Memorandum on Economic and Financial Policies agreed with the EU Commission, the ECB and the IMF.
However, AIB has informed me of the following:
While AIB’s standard notes lodged fee is one of the most competitive in the market, we are aware that the above changes will impact on c. 5% of our business customers.
Changes to European Regulations in 2011 have meant that AIB is now obliged to check cash lodgements for fitness and authenticity before lodgement to the Central Bank. Historically, AIB has been one of the only Banks to offer a discount to some of its business customers who prepared lodgements to an agreed standard. This removed the requirement to check the cash in such lodgements and thus allowed for reduced cash handling/notes lodged rates (€0.25 and €0.17) off the standard €0.45c per €100 fee.
As a result of the manual nature now involved in checking/counting cash, a review has taken place of AIB’s historical cash handling fees.
In this regard, we have written to all impacted customers offering them the opportunity to approach the Bank to discuss their transaction fee arrangements in advance of the next fee charging period. These discussions and any potential revised fee negotiation and transaction fee arrangements can be put in place up to 30th August next and back dated to the start of that fee quarter. AIB’s business customers often negotiate individual fee arrangements based on their specific circumstances and needs, and the bank is offering them the opportunity to do so in the coming months in order to minimise the impact of the above changes.
More broadly, there may be opportunities for business customers to reduce their overall cash handling and fees through some electronic banking services such as:
- AIB’s Point of Sale systems
- AIB has also launched its ‘contactless payment’ service for transactions up to €15 which involves customers holding their card up to a secure reader which records the transaction in seconds
- For business customers with larger cash lodgement requirements, the use of AIB’s centralised Lodgement Processing may reduce costs.
- In-store ATM’s offers the ability to recycle cash and which may reduce cash lodgement costs.”