The Central Bank will monitor the closure of bank branches to ensure social groups and the regions are not deprived of services.
The new responsibility is one of a number assigned to the Bank following the establishment of the new Irish Financial Services Regulatory Authority (IFSRA) within the institution.
The decision will implement a key recommendation of the Department of Finance/Central Bank working group on strategic issues facing the banking sector, which last year recommended that the new regulator take on this role.
Monitoring of branch closures will come under the new regulator's legal mandate to protect the interest of consumers of financial services.
The newly created office of Director of Consumer Affairs will deal with the issue but will not have power to stop the banks closing branches.
The Government has made it clear it expects the banks to work together to ensure than access to services is maintained.
This is also in line with the Department of Finance/Central Bank working group recommendation that the industry find its own solution to the problem of ensuring that access to banking services in all regions and by social groups is maintained.
The banks can address the problem with a number of measures, including agency arrangements with other non-bank retail outlets, or electronic systems or otherwise, suggests the working group. The Department of Finance has written to the Irish Bankers' Federation on foot of this recommendation suggesting it draw up a code on branch closures to ensure continued access to banking services for people affected by branch closures.
The federation is considering the proposal and has indicated it is hopeful it can meet the Department's wishes.
The IFSRA will monitor and report on the implementation of the programme, but will not have powers to stop closures. It will still be able to exert considerable pressure on the banks.
Addressing the Oireachtas Joint Committee on European Affairs last week, the Governor of the Central Bank, Mr Maurice O'Connell, said that although the Bank could not compel banks to keep branches open "we do remind them of the their social responsibilities".
Three of the four main banks are planning to close branches in the immediate future. Bank of Ireland has the largest closure programme and plans to shut 65 branches by 2002 as part of a #65 million rationalisation plan. The Irish Permanent had planned to cut 10 branches in Dublin and convert seven rural branches into agencies prior to its merger with Irish Life. Further rationalisation is not possible. Ulster Bank also plans to restructure and National Irish Bank has closed a number of branches. The IFSRA is not due to be up and running until 2002. The chief executive of the body and the director of consumer affairs are due to be appointed on an interim basis before the summer, pending the statutory establishment of the body.
