The central bank sits back as thousands of account holders are thrown to the wolves

About a million accounts have been affected, with the potential for chaos being very likely.

Central Bank of Ireland (CBI) Governor Gabriel Makhlouf and CBI’s head of consumer protection have both admitted that neither the closing nor the existing banks are prepared for the massive disruption ahead.

This means that the impending exit of the two banks and the forced closure of so many accounts has all the hallmarks of chaos in the making.

And yet this result was entirely predictable.

We know the banks are closing but we suffer from an information deficit as details on how people are finding new homes for their accounts are scarce

KBC Bank is accused of disrespect for its customers.

It issued a terse statement this week, telling its customers that they have just 90 days from the time they receive a letter from it to close their accounts.

The letters should go out in early June.

This is in contrast to Ulster Bank, which is giving its 900,000 current account holders six months to find a new home for day-to-day banking and savings.

Ulster Bank has 360,000 active personal current accounts, 300,000 active deposit accounts and 70,000 business accounts in the Republic.

The Financial Services Union (FSU) branded the shorter deadline for KBC customers as “irresponsible”.

It said giving customers 90 days to close their accounts while saying it was almost impossible to answer a call from one of the big retail banks showed complete disregard for their customers.

FSU General Secretary John O’Connell questioned why the central bank was not stepping in to ensure realistic deadlines were set and met by both banks.

The problems faced by both KBC and Ulster Bank customers when looking for new accounts are manifold.

Bigger players Bank of Ireland and AIB don’t seem to want new customers for current and deposit accounts.

In many cases, those wishing to open an account with these banks are given appointments weeks, sometimes months, in advance.

If you want to make a transfer to a bank where you can take out an overdraft facility, you must have had the new account for at least three months before you can apply for an overdraft facility.

Customers trying to outsource their banking are also finding that central bank regulations require them to undergo a credit check in order to obtain an overdraft or credit card.

They must be screened for “repayability” under the bank’s consumer protection code.

This means that customers with a new checking account will not automatically receive a credit card or overdraft facility.

And the banks have failed to recruit enough staff to meet the massive demand for account openings.

The waiting times when calling a bank are frustratingly long.

The exception to this is Permanent TSB, which wants new accounts.

The central bank’s switching code is designed to make things a lot easier.

But many banks will not take a bank’s word that someone wants to transfer their direct debit to a new bank for fear of violating GDPR regulations.

The average affected customer has up to 10 transactions per month on their checking account.

This means that around seven million individual direct debits, recurring card payments and transfers could be affected by the mass migration of customers to new payment providers.

Labor Finance spokesman Ged Nash said: “I’m really concerned that the banks are not ready yet.

“The evidence I get from voters is that they face waiting times to properly set up and run new accounts.

“This can be catastrophic if not managed properly. The central bank really needs to stand up for consumers.”

The central bank was asked about its failure to take the lead in mass account closures and reallocations.

It was also asked why there is no steering group made up of the closing banks, existing current account providers, direct debit providers, other regulators and the banking and payments association.

The central bank was also asked why it did not run an information/awareness campaign.

Finally, it was asked whether she had learned lessons from her disastrous handling of the financial collapse and her lack of focus on consumer protection.

Rather than answering the specific questions, the central bank issued a statement saying its focus is on the customer.

It said it set out its expectations for how banks should treat their customers “at this time of unprecedented change”.

“We are closely monitoring compliance with the expectations we have set and stand ready to take further action as needed if this transition does not progress in line with those expectations.”

The regulator said the closures are a priority issue for it and it has teams across the central bank working on the issue and meeting with industry groups.

This is to “ensure that all banks and their respective boards identify, manage and mitigate the risks that may arise from the withdrawals from both the acquiring and exiting institutions’ perspectives,” it said.

After more than a decade of financial collapse, we have been promised “intrusive regulation” by the central bank.

This recognized that the central bank’s soft, non-intrusive approach to banking regulation was a major factor in the collapse of financial markets.

The central bank must once again commit to intrusive regulation.

Otherwise, the massive bank closures in Ulster and KBC Bank could be disastrous for consumers.