A former ACC chairman rejected a suggestion from Mr Jim Mitchell yesterday that the bank was saying one thing on operating non-resident accounts while doing another.
The committee heard consistent problems were found with branch managers in the operation of bogus non-resident accounts despite instructions from head office on the importance of compliance.
Mr Dan McGing said although DIRT issues were raised in eight audited branches in 1992, the management "tried right throughout the period, as evidenced by the instructions from senior management down to the branches.
"They may not always have succeeded and for that we regret it, but there was never any suggestion that we were complicit in it or even tolerating the thing," he said. An internal memorandum in March 1993, to the general manager of retail banking, Mr Jim Skelly, referred to certain bank managers' "attitude to banking standards and to legal requirements which needs to be sharply reversed".
It stated that Ernst and Young had found, despite reminders having been made to managers to tidy up non-resident accounts, that "even at that date, Thurles had £1.3 million of deposits not covered by declarations".
The memo added that Internal Audit "found deficiencies on a significant scale in December 1992, even in branches where we had secured written confirmations from the branch manager that our recommendations were being implemented".
Mr Pat Rabbitte said the memo was "a most damning indictment" of the bank's culture.
Mr McGing replied that it was indicative of what the bank was trying to achieve and was the culmination of a clean-up exercise.
The same memo referred to significant progress "in eliminating the most glaring irregularities in the administration of non-resident accounts.
"We reclassified about £7 million worth of non-resident accounts as resident and that was the culmination of that effort," he said.
Mr McGing said many branch managers were agricultural science graduates rather than business graduates, taken on because of their local contacts, but necessitating further training "as time went by". They were good footballers and hurlers, he said.
Asked about a suggested £17 million liability on bogus non-resident accounts for the period to December 1992, he said because of an assurance from Revenue the following February, "we were happy that no such provision had to be made".
A draft Long Form Report (LFR), carried out by the external auditors in 1992 as part a privatisation process begun at the time but later abandoned suggested that a potential DIRT liability of £17 million existed, based on levels of non-compliance found in eight branches and a total non-resident book of £188 million.
Mr McGing said the LFR was a first draft which management disagreed with. The paragraph describing a possible £17 million liability had been withdrawn and the reporting accountants had stated ACC was generally in compliance.
"The longform report was not the longform report, it was a draft longform report, and it never became a longform report. It was a first draft which, I believe, management felt had no credibility."
In his opening statement, he said ACC was at all times dedicated to ensuring compliance with DIRT and SSA (Special Savings Accounts) regulations. A culture of adherence to regulatory matters prevailed following the reconstitution of the internal audit department in 1988, he stated.
He said that allegations being made against other financial institutions by staff that "the bank down the road, you can go in and open an account there" were looked on as excuses.
Addressing a suggestion from a Revenue district inspector in 1987 that "the ACC as a matter of policy were facilitating the evasion of DIRT for their clients by setting up fictitious UK accounts", he said: "We never had knowledge of going out to flout regulations. I mean that very seriously."
There was a lot of emigration from the west where a lot of ACC deposits were based, and many emigrants would have had British and US contacts. "We would have had of the order of 10,000 to 15,000 non-resident accounts through the period. And we were only 2 per cent of the market."