The remit of the Cabinet committee dealing with mortgage arrears is to be expanded to include general banking issues, Taoiseach Enda Kenny has said.
Mr Kenny was responding in the Dáil this afternoon to questions from Fianna Fáil leader Micheal Martin on the AIB increase in mortgage interest rates.
Mr Kenny said the Government was not in a position to direct that interest rates should not be passed on.
"This is a commercial decision by AIB," he added.
"Yes, it is difficult and challenging for people on variable mortgages, but it is necessary that this bank get back to profitability."
Mr Kenny said that if that was not the case, the State would have to continue to recapitalise the banks.
Mr Martin said that last week, for the second time in a month, AIB announced a major increase in its standard variable interest rate mortgage to four per cent.
This, he said, would affect 70,000 householders and had been described by one expert as "absolutely obscene".
He said the decision was further evidence that the banks and the Government had essentially abandoned mortgage holders.
