AIB has scrapped plans to remove cash facilities from 70 branches across the country, following significant public and political criticism of the move.
On Friday the bank announced it had decided not to proceed with the proposed changes to have 70 further branches no longer process cash, given “customer and public unease” to the change.
One senior source said Government “displeasure” at the initial decision was made known to the bank ahead of the U-turn.
It is understood finance officials had been in contact with AIB about the controversy regularly over recent days. Feedback was channelled through officials and Minister for Finance Paschal Donohoe did not speak directly with AIB executives, one source said.
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In a statement, AIB said recent years had seen a “dramatic increase in the use of digital banking services and a decline in branch visits and cash usage”, with a 36 per cent drop in cash withdrawals from ATMs and a 50 per cent fall in cheque usage over the past five years.
“AIB has also seen a fall of almost 50 per cent in branch over-the-counter teller transactions, while mobile and online payments have increased by 85 per cent in that same time frame,” the statement said.
The bank said that fall in demand for cash services was the backdrop to the recent decision. “However, recognising the customer and public unease that this has caused, AIB has decided not to proceed with the proposed changes to its bank services,” the statement said.
The decision to abandon the planned changes followed comments made by Taoiseach Micheál Martin calling for the bank to “reflect” on the plans. Minister for Rural and Community Development Heather Humphreys had also called on AIB to pause the decision to shift 70 branches to cashless services.
The climbdown by the bank was welcomed by both Government and Opposition politicians on Friday.
Mr Donohoe said banks played a “key role in maintaining the flow of cash through the economy and ensuring appropriate access to retail banking services for all in society, including the vulnerable”.
“I note the significant public reaction to AIB’s announcement earlier this week, and I welcome the bank’s decision not to proceed with the proposed changes to customer services in certain branches,” he said.
Sinn Féin finance spokesman Pearse Doherty also welcomed the U-turn by the bank and criticised the initial decision as one that “would have abandoned local communities and vulnerable customers”.
“It is clear that AIB has climbed down from these disgraceful plans in response to a groundswell of anger from customers, communities and civil society and the fact that the State maintains majority ownership of the bank,” he said.
Mr Doherty said the controversy raised “serious questions” about how the decision was taken in the first instance, which he said had shown “scant regard” for the needs of customers and communities.
Minister of State with responsibility for financial services Seán Fleming said the Government had been “blindsided” by AIB’s initial decision. Mr Donohoe and the Department of Finance had only been informed of the plans shortly before the changes were announced earlier this week, he said.
John O’Connell, general secretary of the Financial Services Union, said the plan would have hit “vulnerable people and small business the hardest”. He said “banks need to revaluate their rush to please and reward their shareholders at the expense of customers, businesses and staff”.
Prior to the bank reversing the policy, Independent TDs Mattie McGrath, Danny Healy-Rae and Michael Collins walked into AIB headquarters demanding to speak to chief executive Colin Hunt. The group was heavily critical of the “ham-fisted” proposed changes.
