Banks should pass on the benefits of reduced corporate tax to customers in the form of lower charges, the Minister for Finance has said.

Addressing the annual dinner of the Institute of Bankers in Dublin last night, Mr McCreevy said he would like to see a "significant proportion" of the bank's lower tax burden in the future benefiting customers. In return, the Minister said he would look at the vexed question of stamp duty on transactions.

He also referred to the thorny issue of dormant bank accounts. The Minister is looking at proposals as to how banks can be "relieved" of the burden of holding funds in dormant accounts in perpetuity. "I make no apology for this. Whether we like it or not, there is a widespread belief that banks were not doing enough to find the owners of dormant funds. In my view, it should always have been a matter of pride for the banks to go out of their way - and to be seen by the public to have gone out of their way - to find the owners of dormant accounts." The Minister said he had found it necessary to step in and regulate the matter but acknowledged the industry's co-operation. In his address, the president of the Institute, Mr Martin Wilson, who is also chief executive of Ulster Bank, took issue with the Minister's plea to pass on corporate tax savings to customers and the proposals in this regard contained in the recent strategic review of the future of Irish banking.

The report recommends that the banks should use tax savings to make electronic or automated banking transactions more attractive to a wider range of customers, while maintaining appropriate charges for paper-based transactions.

It proposes that the Department of Finance should review the taxation arrangements for payment mechanisms, with a view to rewarding the move to a more efficient electronic system without reducing the overall yield.

"It will come as no surprise to you that I take issue with these particular recommendations. It is worth noting that, in general, charges for electronic transactions are cheaper than for paper transactions as they currently stand," Mr Wilson said.

He said the Minister's call with regard to passing on lower taxes would be discriminatory if it only applied to the banks and not every other company in the State.

"It also ignores the fact that we have already invested millions in the development of Internet banking, debit and credit card and other electronic payment mechanisms and are committed to further improvements in these areas as technology continues to develop" he said.

Mr Wilson added that the banks had been in the spotlight in relation to DIRT and rightly had now paid for the "inadequacies" of past procedures.