Hi °C | Lo °C CONSUMER chiefs have criticised plans by Allied Irish Bank (AIB) to charge customers for transactions unless they have €2,500 in their current account.
The bailed-out lender announced it will change its criteria for free banking for up to 60pc of its customers from May 28.
The National Consumer Agency (NCA) described the new requirements - to maintain a credit balance of €2,500 in a current account for a quarter - as overly restrictive and disappointing when people are struggling to manage their money
It called on AIB customers to review their statements to assess the charges they will be subject to and to consider switching accounts to maintain free banking.
Ann Fitzgerald, chief executive of NCA, said: "Clearly, many people do not have €2,500 that they can leave permanently sitting in their current account.
"In addition, with no interest paid on credit balances, this means that consumers are losing out on up to €98 a year in interest that they could earn if this money was on deposit, depending on the type of deposit account chosen.
"Many consumers will be unable to meet this condition unless they move money from a savings account into their current account, thereby losing out on the interest they would earn."
Up to now anyone who made at least one transaction using the AIB debit card and at least one debit transaction using AIB phone and internet banking in the same fee quarter got free banking.
ATM withdrawals, standing orders, direct debits, automated lodgements (eg salary), AIB phone and internet banking transactions and AIB debit card transactions are charged at 20c.
Meanwhile, paper and staff-assisted transactions will be charged at 30c. They include cheques, counter withdrawals and lodgements, and staff-assisted transactions at any AIB branch counter or in the Post Office.
AIB maintains that after the changes, 40pc of personal current account customers will still qualify for free banking including students, graduates and the over-60s.
The bank said the move was driven by the need to enhance cost recovery across all AIB businesses.
Bernard Byrne, director of personal and business banking at AIB, said: "Free banking offerings across the industry have changed significantly in recent times.
"While this was a difficult decision to make, nonetheless it is a necessary one if we are to continue to create the conditions in which we can become a strong and viable entity again."
