The chairman of Allied Irish Bank has told the Dail Public Accounts Committee some customers took advantage of the bank by setting up bogus non-resident accounts.
Mr Lochlann Quinn said AIB had paid penalties on bogus accounts it had not benefited from and was duped. "We were paying tax where we were taken advantage of by people."
Mr Quinn said there was pressure from customers at local branches to set up such accounts. There was a culture in the pre-1986 period for bank staff to behave like sales people and though they may have suspected something was wrong with an account they would not say it.
Top management at the bank knew nothing of the practice of setting up bogus non-resident accounts. "There was no attempt at the top of management to instigate this . . . it was not a banking-wide thing," he said.
When asked by the committee chairman, Mr Jim Mitchell TD, if there was a need for discussion in the Irish Federation of Banks about banking practice, Mr Quinn replied: "This was a unique issue . . . I can't see us getting together to discuss our next act."
Mr Tom Mulcahy, chief executive officer of AIB, said the bank had paid a price for what was uncovered in the DIRT inquiry. "I would feel at this point we have recognised our mistakes and we have paid pretty dearly for them." He said AIB had paid a £90 million settlement to the Revenue and £55,000 interest on the tax.
Mr Laurence Crowley, chairman of Bank of Ireland, told the committee there were strong grounds for the bank to contest a portion of the settlement it paid the Revenue Commissioners. However, it would not be in the interest of the bank or the public to do so.
Mr Maurice Keane, chief executive of Bank of Ireland, told the committee some people who had been involved in the bogus accounts issue were no longer employed by the bank.
National Irish Bank told the committee it was considering disciplinary action but the process had to be fair.