Greater transparency in the banking system was required and banks were committed to this aim, the director general of the Irish Bankers' Federation (IBF) told an Oireachtas committee yesterday.
But Mr James Bardon, speaking at the Joint Committee on Finance and the Public Service, was criticised by some members for "snow-jobbing" them after he refused to comment on banks other than National Irish Bank in advance of the completion of investigations.
At the end of the session, the Democratic Left TD, Mr Pat Rabbitte, said that, as a cross-party committee, "we are not interested in being snow-jobbed" and that Mr Bardon should take that message back to IBF members. The Labour Party TD, Mr Michael Noonan, described the session as "disappointing", saying the IBF seemed to represent the vested interests of its members.
Senator Avril Doyle said that the committee was dissatisfied with the response which appeared to be one of "hear no evil, see no evil, speak no evil" on the culpability of members on overcharging. She said the IBF had failed over a 10-year period to monitor overcharging accusations.
Mr Bardon told the committee that practices at some of National Irish Bank's branches had damaged the banking sector "as a whole".
"Based on the banking sector's overall track record, we are satisfied that our member banks will not be found wanting to restore that confidence," he said.
The IBF did not condone irregularities, he said, and it was awaiting the outcome of the various reports before responding formally. "Certainly it was not our intention . . . to come in here and to snow-job.
"We have tried to be as open as possible with you," he said. Mr Bardon defended banks' treatment of small and medium-sized enterprises (SMEs) in the face of recent criticism from the small business lobby group, ISME. "Some 60 different initiatives in support of SMEs have been put in place by individual banks during the 1990s, 16 of these in 1997 alone," he said.
Banks profits had risen on the back of the Irish economy's above-EU average performance over the past five years. Half of banks' personal customers did not pay bank charges for account maintenance. Business customers, on average, paid £280 a year, which was 25 per cent lower than in Northern Ireland, according to a Small Firms Association (SFA) study, he said. The director of consumer affairs, Mr William Fagan, who also appeared before the committee, said that there was now a lack of trust of banks among some consumers who had complained about the level and lack of transparency of bank charges.
The problem with charges, he said, was that they accrued every time there was a transaction. It was impossible for an individual to check interest charges calculated on a daily basis without the aid of software. "That is something that we are going to have to address," he said. When banks overcharged, they should pay back the amounts plus a penalty interest rate, he added.
