Irish banking 'not competitive enough'
The Irish banking sector is not competitive enough and consumers are paying too much for financial services, an Oireachtas report said tonight.
The draft interim report from the Finance and Public Service Committee called for sweeping regulations within the sector to making banking quicker, cheaper and more customer-friendly.
The 25-page document – which will inform Government policy – was compiled from Committee hearings with interested parties from the banking and finance sector going back to 2003.
It said: “The basic conclusion of the Joint Committee is that the banking and finance sector in Ireland is not sufficiently competitive.
“As a result consumers are paying too much for loans and money payment services.”
In the report, the Committee also calls for portable direct debits, abolition of stamp duties in cards and credit cards, reduction in the use of cheques by Government and greater transparency and accountability.
The Committee noted that a Financial Services Ombudsman, who will investigate complaints from the public about banks and financial institutions, is to be appointed on April 1.
One submission to Committee members from new market entrant the Bank of Scotland argued that the Irish banking sector was dominated by a small and decreasing number of banks which offer a limited range of products.
The bank’s chief executive, Mark Duffy, pointed out that the playing field was uneven, consumer legislation was inadequate and as a result consumers have to accept “outrageously” high pricing.
Speaking on the draft report, Committee vice-chairman, Michael Finneran said: “Scandals have beset Irish banking for a long number of years now.”
He said he was still not sure that financial watchdog IFSRA had enough powers to detect or punish irregularities within banks.
“I’ve been preaching for some time now how bank customers have been treated in this country.
“There has been scandal after scandal. The latest scandal we have is the extraordinary charges on credit cards.
“It’s the greatest rip-off of all time that is going on in this country and we still haven’t ways of dealing with it.
“Nobody in the banking sector, other than some internal discipline, has ever been exposed or have ever got any penalties as far as I know. No licence has been revoked or endorsed in any of the financial institutions that I know of.”
The Roscommon senator called for more hard-line sanctions for the banking sector and for members to focus on combating money-laundering activities in the Committee’s final report.
Opposition finance spokesman Richard Bruton suggested that banks should be obliged to inform customers if they change transaction fees in any way.
He also called for EU-wide surveys to enable customers to compare banking charges in Ireland with other EU countries.
The Dublin TD also appealed for more simplified ways to switch from one bank to another.
Sinn Féin’s Dail leader, Caoimhghin O Caolain, called for greater legal protection for “whistle blowers” within the banking sector.
The interim draft report, which was drawn up by Jim Dorgan of Curtin Dorgan Consultants, will be discussed by the Committee again in mid-April.
