Banks must do more to facilitate hundreds of thousands of customers being forced to move their accounts, the Central Bank of Ireland has said, as Ulster Bank and KBC prepare to shut down their Irish businesses.
The bank has summoned leaders of the remaining retail banks in the Irish market to a round table meeting, which will take place on May 17th.
More than one million accounts are looking for new homes. These include personal current accounts, savings accounts and company accounts.
Speaking in the Dáil on Wednesday, Labour party finance spokesman Ged Nash said “tens of millions” of direct debits and standing orders could be in disarray over the coming months because of the “disorganised way that all banks are approaching this”.
Taoiseach Micheál Martin said there was an obligation on both existing banks and those exiting the Irish market to do “everything they possibly can” to facilitate customers.
“Two weeks ago the Governor of the Central Bank told me that banks are not ready to deal with the biggest transfer of bank accounts the State has ever experienced,” he said, referring to comments made by Central Bank governor Gabriel Makhlouf before an Oireachtas committee.
“The potential for catastrophe is obvious to me,” Mr Nash said, urging the Central Bank to use its powers to delay the departure timetables of the exiting banks if the process wasn’t working for their customers.
The comments come amid reports that customers are struggling to secure new arrangements, with many getting no further than dates some way in the future for meetings to discuss the issue with bank officials.
Preparations
The Central Bank said on Wednesday that banks needed to have sufficient plans, preparations and resources in place to respond to unprecedented migration of accounts. They also need to ensure that the notification periods given to customers are sufficient to allow them to complete the transfer of their business, including direct debits and other account elements.
Special arrangements must also be put in place for vulnerable customers, it said.
"We are assertively supervising the banks to ensure they prioritise the interests of customers and prospective customers throughout this unprecedented volume of account migration," said Derville Rowland, director of financial conduct at the Central Bank.
She said the roundtable with bank chief executives would focus on work by the banks to ensure consumers’ best interests were protected.
“I acknowledge the unprecedented scale involved, and also acknowledge that staff within the banks are working extremely hard in challenging circumstances to provide customers with the services they require,” Ms Rowland said. “We are keenly aware of the impact on both staff and customers in that regard.
“But while recognising the challenge an exercise of this scale represents, it is also clear that, in terms of the banks’ overall plans, more needs to be done.”
The Central Bank said it would also carry out another review of the times customers were kept waiting for telephone customer service. The review will take place before the end of June. Banks were given an action plan to improve service after a previous waiting time review, which was supposed to ensure sufficient resources were available to manage both normal call volumes and to deal with surge events.
