Banks cannot be ordered to stay open to provide services to communities in the same way that shops cannot be ordered to remain open in a particular town, the Minister for Finance, Mr McCreevy, told the Dβil.
The banks "must be left free to deal, as they see fit, with competition that has been forced on them". But, he added: "The way in which certain changes have been introduced recently by some banks is to be regretted."
"It is imperative that financial institutions have regard to the needs of all their customers but in particular, the needs of older people and those with disabilities," he said.
Labour's finance spokesman, Mr Derek McDowell, who raised the issue during finance questions, echoed the concern of consumer organisations and customers about the withdrawal of certain counter services by a number of banks.
He said the voluntary code of branch closures, agreed with the Irish Bankers' Federation, was seriously deficient because it did not provide for any consultation with communities before closures. He said it would provide "little comfort to vulnerable communities and individuals who fear peremptory decisions to close their local branch".
Mr McCreevy pointed out however that the code was a step forward, in which the banks would give two months' notice of its intention to close a branch.
He did not have statutory authority for this but "the code is a step forward".
The Minister would ask the Irish Financial Services Regulatory Authority to monitor and report on access to banking services.
"But banks cannot be required to maintain a level of services, no more than a supermarket or a petrol station can be told to do so, regardless of commercial realities," he said.
The Labour spokesman said, however, that recent closures were not carried out because of financial losses but were "simply a matter of maximising profits and, given the strategic importance of banking in rural Ireland, and to the economy as a whole, that is something we should not easily tolerate".
Many new entrants to the financial market, said the Minister, were providing electronic banking and did not need a "plethora of branches".
He pointed out however that it was his experience that when there was a lot of hassle, "banks often consider that the hassle is not worth what they intended to do in the first place".
