SOME of the main banks are expected to apply for an increase in bank charges in the medium term according to the director general of the Irish Bankers' Federation (IBF), Mr Jim Bardon.
While he "was not aware" of any imminent changes in the pipeline, bank charges had not increased for two to three years, he said.
Mr Bardon, who was speaking yesterday at the presentation of the IBF's annual review, said that the industry continued to have strong reservations about certain elements of the Consumer Credit Act, particularly the regulation of charges. "We're unhappy with banks charges per se being regulated, as we maintain that we should have the freedom to price our services."
Under the recently enacted Consumer Credit Act, the Director of Consumer Affairs, Mr William Fagan, has the authority to regulate bank charges and the main banks are currently in the process of notifying him of their existing charge structure.
If a bank subsequently wants to revise its charges, it must pay a £25,000 fee to the Office of Consumer Affairs, which then has four months to adjudicate on the matter.
Asked if the consumer would ultimately have to pay for the £25,000 fee, Mr Bardon replied. "At the end of the day, the customer pays for all regulation of a system."
Mr Bardon was also critical of the impact of An Post's savings products, which are tax free and Government guaranteed. Such products were "a distortion of competition in the marketplace", he added.
The deputy director of the IBF, Mr Frank Sexton, said the new clearing system would, for the first time, allow building societies or banks to have selective access to one section of the clearing system. The new structure will separate clearing into four areas paper debits, paper credits, bulk electronic payments, and high value electronic payments under the new Real Time Gross Settlement System (RTGS).
RTGS, which cost about £5 million to develop, is a real time system for payments of more than £25,000 which the IBF says will eliminate any remaining risk associated with transfers of large funds.
