The State will not sell off any more than 25 per cent of AIB before 2019, according to the draft programme for government.

The plan also commits to a new court to deal with mortgage arrears - with the power to impose solutions on lenders – and to a new examination of the mortgage interest rates charged by the banks, to try to put pressure on them to reduce rates further.

The outgoing government had planned to sell 25 per cent of AIB onto the market later this year, and this can still go ahead, though no commitment is given in the document to proceed.

Previously finance minister Michael Noonan had said that after the float of the initial 25 per cent in 2016, the sale of the next 25 per cent of State shares would likely take place between 2017 and 2020.

Stake

The new document now indicates that no sale beyond the initial stake would take place before the start of 2019. Investors who are asked to take up the initial 25 per cent, if the sale of this goes ahead this year, are likely to want clarity on this and on whether the Government still plans to fully privatise the bank at a later stage, as they would be less likely to invest in a bank in which the Government would retain a minority stake in the long term.

The document would suggest that there may be some political support for the State retaining bank shares in the future, though this is not explicitly stated.

The document also says that the Central Bank will be asked to procure an independent assessment of the arrears and negative equity loan books of the banks.

The draft programme also indicates that pressure on banks to cut standard variable mortgage rates will increase. “It is not ethically acceptable” for Irish banks to charge excessive rates, it says and the government will take “ all necessary action” to tackle this.

Switching

This will include new measures to make mortgage switching easier, including a new standardised switcher form. The government is also to ask the Competition and Consumer Commission to work with the Central Bank to set out the options for the government in terms of legislation and regulation to increase competition and lower the cost of loans.

New measures to help people in mortgage arrears are also proposed. A new national service is to be established to standardise the supports available to homeowners in arrears “ with powers and ersources needed to advise, assess, negotiate and recommend solutions.”

A new court is to be established to handle morttgage arrears cases and other personal insolency cases. It will have the power to impose solutions, including those recommended byu the new national service.

The government also promises to work with the Central Bak to amend the code of conduct on mortgage arrears to include an obligation on mortgage providers to offer “ a range of sustainable solutions” .

New measures are also to be examined to widen the role of credit unions and gradually increase their lending limits, allowing some to engage in mortgage lending.