Government knew of AIB’s cashless plans four days before move despite claims they were ‘blind’

The government was informed four days before the announcement of AIB’s controversial plan to downgrade a large number of its branches, although it was claimed it was “caught by surprise” by the move.

he Irish Independent has noted that the Treasury Department was told weeks ago that the bank was working on a plan to remove cash-handling facilities from 70 branches.

Officials knew the details of the cashless plan four working days before it was announced – longer than it took the bank to turn around – and didn’t intervene.

It has now emerged that the Treasury Department was briefed last week on the details of the plan to remove cash and check services from branches and rip out their ATMs.

Ministry officials did not respond to the briefing by telling the bank not to proceed when it was given the details of the controversial move, it said.

It comes as AIB was yesterday forced into an embarrassing about-face in its plans to make so many branches cashless after a massive backlash from public and rural TDs.

Taoiseach Micheál Martin had requested a meeting with the bank’s CEO, Colin Hunt, after urging the bank during a visit to Asia to “reconsider and reconsider” its decision to scrap cash facilities in branches across the country .

The revelations that AIB had informed the ministry came after Treasury Secretary Seán Fleming insisted that he, Treasury Secretary Paschal Donohoe and the government had been “caught by surprise” by the decision.

He said Mr Donohoe and his department were only informed shortly before the announcement.

Asked yesterday if the government had been caught napping on the matter, Mr Fleming said: “The government was caught unawares by this decision.”

He said the department was informed of the decision at very short notice and there was no opportunity to discuss it.

AIB did not comment when asked if it had informed the department long before announcing it was downgrading the branches.

However, the Treasury Department has confirmed it had an official at the AIB board meeting discussing the decision to eliminate cash at its 70 branches.

Information about what was discussed at that meeting was then “passed through” to other officials in the department.

The department was also officially briefed by AIB on Friday on the full details of the planned branch office downgrade, four days before it was publicly announced Tuesday morning.

A spokesman said: “A department official was first briefed on the AIB press release on Friday. This information would have been sent down the line and the Minister was informed the following week.

“The information provided was a courtesy call and was for informational purposes only.”

The spokesman said the Treasury Secretary is barred from intervening in the commercial and operational decisions of any particular bank, even if the state holds a stake.

Treasury officials are briefed on issues discussed at AIB board meetings through a board briefing pack, the spokesman said.

Meanwhile, Fianna Fáil’s backbenchers claim a win after the reversal after Cork TD James O’Connor, backed by 40 TDs and Senators, called for an emergency meeting with the Treasury Secretary over AIB’s move.

“There was enormous anger in Fianna Fáil,” Mr O’Connor said yesterday.

“That’s something that really separates Fianna Fáil and Fine Gael when it comes to politics and rural economies and services. Fianna Fáil understands the importance of bank branches in people’s daily finances.”

Roscommon Senator Eugene Murphy said a similar campaign must take place now to address recent Bank of Ireland branch closures.

Dublin Bay South TD Jim O’Callaghan said the public interest directors who sat on the AIB board until 2018 should be brought back.

Mr O’Callaghan also said that “many members” of the board do not live in Ireland and are not aware of the “needs and requirements of its Irish customers”.

“The government should reconsider reappointing public-interest directors to AIB when its disconnected board is unwilling to reflect the interests of its clients and its dominant shareholder,” he said.

Meanwhile, finance union FSU said AIB urgently needs to appoint consumer and labor directors to its board to rebuild confidence after the record-hunting mortgage penalty and debacle over its attempts to downgrade branches.

Secretary-General John O’Connell said there was an urgent need to rebuild confidence in the retail banking sector.

“A common stakeholder approach to banking across the EU should form the basis for change,” he said.

And advocacy group Age Action said what is needed is a new inclusive banking model where everyone can gain access to affordable and accessible banking facilities.

Older people would have been the big losers if the bank had continued with its plans to downgrade branches, Age Action’s Celine Clarke said.

AIB said it made the decision amid so-called “customer and public unease” over the move to stop accepting cash at so many branches and remove ATMs from those branches.

There has been a dramatic increase in the use of digital banking services and a decline in branch visits and cash usage.

Over the past five years, there has been a 36 percent drop in cash withdrawals from ATMs and a 50 percent drop in the use of checks.

AIB also saw a nearly 50 percent drop in in-store over-the-counter transactions, while mobile and online payments grew 85 percent over the same period.

“Against the backdrop of this evolving banking environment and an opportunity to expand its longstanding relationship with An Post, AIB made the decision to remove cash services from 70 of its branches.

“However, given the discomfort this has caused to customers and the public, AIB has decided not to go ahead with the proposed changes to its banking services,” the bank said.

The move means an embarrassing relegation for AIB boss Colin Hunt. Government knew of AIB’s cashless plans four days before move despite claims they were ‘blind’

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