High Court inspectors investigating National Irish Bank will not get details of deposit accounts held at the bank's Isle of Man branch at the time of sterling's exit from the European Exchange Rate Mechanism in 1992. In an unreported judgment, the Isle of Man High Court turned down an application by Mr Tom Grace and Mr Justice John Blayney for permission to inspect the books of NIB's branch in Douglas, the capital of the island.

The two men wanted to examine the books "for the purpose of preparing a list of deposit accounts at the bank in the Isle of Man as at September 30th, 1992, giving details of names on the accounts and addresses of account-holders and account balances as at that date", according to the judgment. No reason was given for why the information was being sought. Sterling was ejected from the ERM in September 1992, leading to an appreciation of the British currency against the pound. The Irish authorities did not devalue the pound until the end of the following January and there was intense currency speculation during the intervening months.

Banking sources pointed out that September was NIB's yearend and the inspectors may have other, more routine reasons for seeking details of the accounts. A Manx judge, the Deemster Cain, refused the application on the grounds that the inspectors were embarked upon a "fishing expedition" and that their investigation did not count as legal proceedings against the bank.

NIB did not oppose the application but instead applied to the court for "guidance" as to whether it was obliged to break client confidentiality and hand over the records to the inspectors. The decision was delivered on April 27th but not reported outside the Isle of Man. Neither Mr Grace nor Mr Justice Blayney - a retired High Court judge - was available for comment last night.

It is understood they have now completed the information-gathering part of a three-year-old investigation and are preparing their report. The investigation had focused on the overcharging of interest and fees by the bank between 1988 and 1998. This involved examining the bank's records and the actions of its employees with a view to establishing who was responsible for the practices.

Separately the inspectors are looking to see if the bank encouraged the evasion of tax and any other obligations on behalf of the bank or third parties. This would include regulations in effect during the currency crisis of 1992.

The inspectors are also looking at the sale of investment bonds to Irish residents by NIB, issued by Isle of Man subsidiaries of Clerical & Medical and Scottish Provident. In a number of cases, the bonds were used by Irish residents to avoid tax.