Fianna Fáil Finance spokesperson Michael McGrath has called on AIB to explain why it is offering a one year deposit rate of 1.4% to German savers which is three times that offered to Irish savers. He has described it as a further example of a banking sector in Ireland which is treating its customers in a deplorable manner.
Deputy McGrath commented, “AIB has inadvertently highlighted once again the shoddy way in which Irish bank customers, from savers to mortgage holders and small businesses are treated by their banks.
“We know from the campaign for fair treatment of mortgage customers that Irish variable rate are much higher than those charged by European banks. However, it’s rare that we see an example as blatant as this of how Irish customers are being discriminated against. There is no reason why AIB should not offer the same rates to their customers in Ireland, the people that bailed them out, as they do in Germany.
“The reality is that as the banking sector has contracted, the dominance of the two pillar banks, Bank of Ireland and Allied Irish Banks, is again apparent. This lack of competition is leading to high costs for customers in terms of interest rates and fees and charges. It is also inhibiting product innovation.
“In a single currency market Irish customers should be able to access competitive banking facilities across a range of products. However competition can be at best described as weak, while in some areas it is virtually non-existent.
“This is not just a problem for savers and mortgage holders. According to the most recent report from the National Competitiveness Council, business interest rates in Ireland are much higher than the European average.
“We believe that now is the time to shake up the Irish banking sector.
“Fianna Fáil recently published proposals aimed at tackling sharp practice and anti-competitive tactics. These include:
– A Code of conduct on mortgage switching;
– Legislation to drive down standard variable mortgages rates;
– Ensuring the credit unions can compete on a fair basis;
– New targets to deal with legacy debt issues.
“The implementation of these will be a priority for Fianna Fáil in government,” concluded Deputy McGrath.