Allied Irish and BoI will be forced to lend €12bn in return for assistance
THE two biggest banks in the country will have to lend more than €12bn this year and next year in total to help businesses, in return for government assistance, Finance Minister Brian Lenihan said yesterday.
People refused credit by the banks will be able to demand an independent review from today, he added.
Allied Irish Banks and Bank of Ireland will each have to lend no less than €3bn this year and again next year to small and medium-sized enterprises, Mr Lenihan said. The banks will have to lend another €100m for environmental projects and €20m in seed capital for new companies supported by Enterprise Ireland, the state agency charged with helping export-orientated companies.
"This will be a significant increase on the figures reported by the banks for 2009 and will help to sustain the economy and foster growth," Mr Lenihan said.
Companies, sole traders and farmers who have had credit refused or withdrawn may apply for an independent review of the bank's decision, the minister also announced. Where the reviewer recommends that credit should be granted, the bank is required to comply or explain why it will not do so, he added.
The minister said he will introduce measures to force the banks to develop expertise in lending to business and develop new credit products.
The two banks will be required to submit lending plans by region and sector for 2010 and 2011 within six weeks.