THE AMOUNT of money Irish banks borrowed from the European Central Bank (ECB) grew by €23 billion in September.

The figure was contained in the central bank’s monthly money and banking statistics report. The 38 per cent increase in borrowing to €83 billion highlights the reliance of Irish banks on ECB funding.

Overall, the dependence on ECB funding of Irish-based credit institutions, including internationally focused banks with operations in Ireland, rose 27 per cent to €121.1 billion.

ECB policymakers have warned banks against overdependence on central bank funds. Earlier this month, council member Mario Draghi said certain banks had become “highly dependent on the liquidity injected by the euro system”. He said this should be addressed by national authorities to avoid “zombie banks”.

The central bank figures also show that lending to households continued to fall in September – down 4.5 per cent from the same month last year. Mortgage lending was 1.6 per cent lower on an annual basis in September, and was down 1.2 per cent on August.

Consumer lending for other purposes also declined by 14.8 per cent, and was marginally down on August figures.

Household lending during September was down €279 million, in keeping with the trend which has seen a drop in loans to households every month in 2010.

Lending to businesses fell by 3 per cent compared with September last year, after a 2.2 per cent annual drop in August.

The Central Bank figures indicate there was a small increase in business loans of a maturity of up to five years in August and September.