AIB climbs down over plans to remove cash services from 70 branches due to ‘public unease’

AIB has reversed its decision to make 70 branches into cashless facilities after a massive backlash.

t said it took the decision in light of what it called the customer and public unease at the move to stop accepting cash at so many branches and pull out ATMs out of those branches.

It said there has been a dramatic rise in the use of digital banking services and a decline in branch visits and cash usage.

There has been a 36pc decline in cash withdrawals from ATMs and a 50pc fall in cheque usage over the past five years.

AIB has also seen a fall of almost 50pc in branch over-the-counter teller transactions, while mobile and online payments have increased by 85pc in that same timeframe.

“It was in the context of this evolving banking environment and the opportunity to enhance its long- standing relationship with An Post that AIB took the decision to remove cash services from 70 of its branches.

“However, recognising the customer and public unease that this has caused, AIB has decided not to proceed with the proposed changes to its bank services,” the bank said.

The move represents an embarrassing climb-down for AIB boss Colin Hunt.

Finance Minister Paschal Donohoe welcomed the U-turn.

In a statement, he said that banks have “a key role in maintaining the flow of cash through the economy and ensuring appropriate access to retail banking services for all in society, including the vulnerable”.

The majority State-owned bank has been in the eye of an unprecedented political storm since the bank bailouts more than a decade ago after Micheál Martin demanded a meeting with top executives at the financial institution and told them publicly to “reconsider” the move.

The Irish Independent revealed how Mr Donohoe and the rest of the Coalition were left in the dark as to the bank’s controversial downgrading of its branches.

Mr Martin called on the bank to “reconsider and reflect on” the plans yesterday while on a government visit to Singapore and was due to haul top executives from the bank in to a meeting next week.

And the Central Bank had joined Mr Martin in turning up the heat on AIB over its plans to refuse to allow cash transactions at almost half of its branches.

The Central Bank said that vulnerable customers should have full access to basic banking services.

The regulator had said that the development is a commercial decision for the board of AIB.

But it added that it “expects all regulated entities, including banks, to ensure that the impact of its decisions is considered carefully and with a consumer-focused approach.”

The regulator said banks should assess the impact of any decision or plan across their full customer base, including vulnerable customers, and ensure that any changes to branches are made in an orderly manner.

“The Central Bank expects banks to provide vulnerable customers with the assistance necessary to ensure that those customers retain full access to basic banking services, including at another location.”

The move has sparked a furious political backlash with numerous TDs lining up calling for a reverse to the decision

And earlier today, Social Protection Minister Heather Humphreys called on AIB to halt the decision to go cashless at 70 branches nationwide.

Ms Humphreys said rural communities across the country are “rightly angry” about the AIB plan.

The minister accused the bank of showing a “complete disregard” for rural communities and insisted they should have been consulted.

“At the very least, AIB should halt this decision until the comprehensive review of retail banking is complete later this year,” she said at an event in Donegal.

“We know more & more people are using card and moving away from cash but small businesses and older people in particular depend on these services.

“The review of retail banking is looking at the entire landscape of retail banking in Ireland including the business model, consumer choice and expected trends over the coming decade.

“I believe it would make sense for AIB to halt this decision and await the outcome of that review,” the minister said.

Green Party Minister Ossian Smyth described AIB’s plan to turn 70 branches cashless as an “opportunity” in community banking for post offices and credit unions across the country.

“I think it’s important that people in rural areas have access to banking, I’m happy to see that it will be possible to continue to lodge cash or withdraw cash from a post office to your AIB account and I think that Bank of Ireland are taking the same approach,” he told RTÉ’s Morning Ireland today.

“I want to see the network of rural post offices strengthened and with that in mind we announced a special subsidy for all post masters to make sure that all post offices stayed in business.

“And we were looking for ways to strengthen the post office to offer more services through the post office and I think this could be the thing that would make them last.”

Mr Smyth said it is “unfortunate” that this decision was made by AIB ahead of the publication of the review of consumer banking.

“I want to see strong community banking across Ireland and whether that’s done through credit unions or post offices or whether it’s done through some form of community banking, whatever way it works,” he said.

“I want it to be possible for people to locally access a place where they can deposit cash or withdraw cash.”

AIB had been summoned to a meeting with the Taoiseach next week where he was expected to urge them to delay plans to push ahead with the move as quickly as they had intended, with AIB saying the changes to branches would go ahead in September and October this year.

“There are a significant cohort of people who need this facility and I believe AIB and the banks should take notice of this,” Mr Martin said.

The Irish Independent today revealed how Finance Minister Paschal Donohoe was given no notice by AIB of its intention to announce on Tuesday that it was turning 70 of its 170 branches cashless this autumn and had asked the Department of Finance to engage with AIB on the issue.

One coalition source said the bank was moving “too quick”, while another said it was “bad form by AIB to do this in a (Dáil) recess with no prior notice or a proper communications plan”.

Junior Finance Minister Seán Fleming has told the Fianna Fáil parliamentary party on Thursday night that AIB boss Colin Hunt has been informed of the ­Government’s annoyance at the decision.

“I’ve spoken directly to Minister Donohoe regarding AIB. The department has been in direct contact with Colin Hunt today expressing annoyance about their announcement.

“AIB are to come back to the department urgently on this matter. I will update you at that stage,” Mr Fleming told his party colleagues in a WhatsApp message.

It came amid a growing clamour from backbenchers, with 40 members of the Fianna Fáil parliamentary party supporting a call from Cork East TD James O’Connor to seek an emergency meeting with Mr ­Donohoe over AIB’s plan.

In a letter to TDs and senators, Mr O’Connor said he does not believe it is acceptable that “we as a party would allow the banks to go unchallenged in their latest efforts to curtail community banking services”.

Leitrim GAA club Ballinamore Sean O’Heslins also hit out at the move this week and called on the GAA to end its sponsorship with the bank if there is no reversal of the decision.

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AIB chief executive Colin Hunt. Photo: Gerry Mooney

Meanwhile, the powerful Oireachtas Finance Committee has called on AIB chief executive Colin Hunt to come before it to explain its decision to downgrade the branches.

Dr Hunt was an economic adviser to Brian Cowen.

Committee chairman John McGuinness said he was outraged by the move, which he said was taken without any warning or consideration for its impact on citizens.

“We need to hold this bank to account,” he said.

The Fianna Fáil TD described the bank’s decision as “another attack on rural Ireland”. He said TDs from all political parties are “outraged” and “something needs to be done to stop it”.

“We will also be in touch with the Central Bank and the minister [Paschal Donohoe],” Mr McGuinness told RTÉ’s Drivetime. He said the Finance Minister “has to have a say” in the matter because of the “holding” that the Government has in the bank.

In a statement issued on Thursday AIB said it was aware of the Taoiseach’s comments and was “happy to engage with him”.