Small businesses in Ireland should be able to switch accounts between banks with ease following the introduction yesterday of the Irish Bankers Federation's (IBF) business account switching code.

IBF chief executive Pat Fallon said all the main banking groups in the State have signed up to the code, which, he said, will "streamline" switching.

He explained that, under the new code, banks are committed to getting new accounts up and running within 10 working days of the approval of the customer's application. The transfer of standing orders, direct debits and other account details must be completed within a further seven working days.

Mr Fallon said businesses interested in moving to another bank would now receive a "switching pack" explaining the process in detail.

"Banks will do most of the work," he said. However, there is a number of steps that the customer must carry out themselves.

Businesses must negotiate the terms of their credit facilities with their new bank, as this is outside the scope of the code, which covers current and demand deposit accounts.

Businesses must also adjust their payroll systems so that payments are correctly made from their new accounts.

Invoice documentation should be updated to include new Bic (Bank Identifier Code) and Iban (International Bank Account Number) details, and businesses should arrange with their new bank to have all direct debits and standing orders transferred.

Mr Fallon says that a key consideration for businesses switching under the code is to "identify the time of the month which best suits them to switch" and which will cause least disruption.

The Irish Small and Medium Enterprise Association (Isme) welcomed the introduction of the code, saying it should level the playing field for small businesses.

Patricia Callan, director of the Small Firms Association (SFA), said the new code "should be very constructive" as it would serve to reassure businesses that the process of switching accounts would be swift.

In anticipation of the code's introduction, Bank of Ireland earlier this week launched a new service for small companies, pledging to offer loans, internet banking and financial advice specifically to firms employing fewer than 10 people.

The bank said it was aiming to sign up 25,000 new accounts and 40,000 loans this year.