Banks are never amongst the most popular of institutions in any country, but in the Republic they've outdone themselves when it comes to scraping the barrel of public opinion.

Over the last eight years, Irish banking has been tarnished by scandals, investigations and overcharging. As a result, most consumers assume that the banks are taking them to the cleaners. However, the results of a recent survey by consultants CapGemini, paid for by the Irish Bankers' Federation (IBF), point out that its members' customers are getting a good deal.

Taking transaction charges for services like ATM cards, current accounts, telephone and online banking, the study found that Irish banks were the third cheapest of 19 countries surveyed.

The survey was the 2005 instalment of a yearly study of banking charges, as opposed to interest rates, in the developed world. CapGemini included this country for the first time after the Irish Bankers Federation (IBF) approached it.

The Republic's financial institutions charge an average of €59 a year for these services, compared with the global rate of €108.

They come out even better when compared with their counterparts in the other 11 members of the euro-zone currency area, where the average is €130.

According to Pat Farrell, general secretary of the IBF, this confirms what the organisation has been saying all along, that Irish banking charges are very competitive when compared with those in other developed countries.

"We have always said that we are very, very competitive when it comes to transaction charges," he says. "And the market is even more competitive than the survey suggests."

The CapGemini study covered AIB, Bank of Ireland, NIB, Permanent TSB and Ulster Bank, which account for 86 per cent of the Irish retail market. It covered 19 services under the headings of account management, payment methods, cash deposits and withdrawals, and occasional services like cheque stopping, drafts and document searches.

It did not include taxes, like those the Government imposes on ATM cards.

But there are limits to Irish banks' ability to increase their charges. They have to get approval from the Irish Financial Services' Regulatory Authority before they can increase charges.

Each application costs the banks €40,000, so they don't make them very frequently. Last year, a Competition Authority report recommended that the provision, known as section 149, be removed on the the basis that it was preventing normal commercial rivalry between the banks.

Its existence also means that the banks compensate for low charges by charging extra interest. Which in effect means that the law is distorting competition throughout the sector.

Mr Farrell indicates that the banks would be happy to go along with any change in this regime, but he says that it is up to the politicians to change it.

But he also argues that the costs of banking could be lower if the Government made progress with its own policy aim of reducing dependence on cash and cheques in this country, and made electronic payments standard for everyone.

"We have the highest use of cash and cheques outside Greece of any developed economy," he says. Greater use of electronic payments would mean huge benefits for consumers in terms of cutting their banking costs, he adds.

But there are indications that the banks can cut charges further. The IBF's code of practice on switching accounts has made it easier for consumers to move from institution to institution. By the end of this month, around 10,000 people will have taken advantage of this.

A number of banks have begun cutting current account charges in a bid to attract new customers and retain existing ones, a clear example of competition delivering real benefits.

Mr Farrell says that the federation will be introducing a similar code for small business accounts next year, something the sector has been under pressure to do for several years.

He concedes that banks themselves have to take a lot of the blame for their poor image, but argues that it should not detract from the fact that in many areas, they are delivering value for money.