CHANGEOVER: AIB has said it will honour cheques written by its customers in Irish pounds after January 1st. The policy U-turn follows the bank's failure to supply euro-denominated chequebooks to current account holders.
AIB announced the move yesterday and conceded that some customers would have to wait at least another week before they receive euro chequebooks.
AIB is the only Irish bank accepting pound-denominated cheques written after the introduction of euro notes and coins on January 1st. It has 400,000 current account customers.
The bank has given repeated assurances since the beginning of January that euro chequebooks were in the post, but a spokesman said yesterday that printing was still under way and it would be after January 18th before some customers get them. Others, mainly those who have not used their chequebook for more than a year, will have to wait even longer.
This is the first significant glitch in the euro changeover within the banking system. Other financial institutions issued euro chequebooks before the changeover.
The AIB spokesman told The Irish Times that customers should only write Irish pound cheques if they had no alternative. The bank also that cautioned some retailers or other financial institutions may be reluctant to accept them.
Some AIB customers who contacted The Irish Times questioned the bank's policy in refusing to allow them use their old chequebooks to make payments, arguing that the Irish currency remains legal tender until February 9th. But a cheque does not carry the same status as cash and is not considered to be legal tender.
The Central Bank of Ireland has confirmed there is no legal provision prohibiting anyone from using a pound chequebook after January 1st, but that banks would have a policy on this issue.
The Irish Bankers' Federation (IBF), the umbrella body representing the financial services industry, agreed a policy that encouraged bank account holders to use only euro chequebooks after January 1st. This was to ensure a smooth transition to the euro and to avoid putting additional pressure on the clearing system.
Reacting to the AIB decision, a spokesman said each bank could make a "discretionary call", but reiterated its advice not to use old chequebooks.
AIB has repeatedly apologised for the inconvenience, and told customers they could get temporary chequebooks while waiting for their own to arrive. The supply in some branches has run out, however.
One AIB customer who contacted The Irish Times said they had been advised at their branch to simply backdate a pound cheque to December 31st to make any payments while waiting for a euro chequebook. The bank said this was not official policy.
But this does seem to be the best option for AIB customers. Although the bank has formally reversed its position on pound cheques, customers can only be confident that cheques will not be returned, or payment delayed, if they backdate them.
A cheque is valid for six months after its issue date. Customers should not deface cheques by crossing out the pound sign and substituting the euro. Such cheques are likely to be returned and a charge levied.
