A damaged telephone line virtually shut down a leading bank's branch network yesterday.

Building contractors working at Cork Airport Business Park cut through a leased line linking Permanent TSB's information technology (IT) centre with Eircom's fibre optic network at 9.30 a.m. yesterday. The accident left the bank unable to carry out routine transactions on one of the busiest days of the week.

Customers attempting to do business in the bank's retail branches yesterday morning were told by staff that it was not possible to carry out any transactions as a result of the accident. ATM card transactions were also hit for a period.

A spokesman for the bank confirmed that the accident hit a number of different systems, but said that most of them were functioning again by yesterday afternoon. He added that, while over-the-counter transactions were being honoured, they were not being applied to customers' bank balances immediately.

He stressed that electronic transfers, such as wage, bill and mortgage payments, done by standing order and direct debit, would not be hit by the accident. The spokesman said that the bank, the retail arm of Irish Life & Permanent, did have a contingency plan for emergencies like this. "The plan worked, but not to our full satisfaction," he said.

A spokeswoman for Eircom said the company had worked as quickly as possible to repair the damage, but added that it involved using a crane to lower a van with the necessary equipment into a trench in which the contractors had been working.

She said that contractors were obliged to establish the location of underground cables and pipes where they intended excavating.