The 60-second guide to... public banking for rural communities
The Government is investigating the viability of a new model of community banking in Ireland. Also known as public banking, those in favour of the model believe it would be helpful to rural dwellers who have lost their local bank or post office.
Supporters also believe a public bank could fill the gap left by the demise of building societies and the closure of the agri-lending bank, ACC Bank.
A public bank would offer loans to both business and personal customers - and operate differently to a credit union, according to Seamus Boland of Irish Rural Link.
It would offer other traditional banking services too, such as savings and current accounts.
"It would be a regional and local bank where profits are made - and then circulated back into the region," said Boland.
As public banks would have a regional focus, they would be restricted to lending to the regional economy, according to Willie Penrose, Labour's spokesman on rural affairs.
A public bank could also be integrated with the credit union and An Post network - with credit unions and post offices selling public bank services across the counter in their branches, according to Penrose.
There are already examples of community banks abroad, including Kiwibank in New Zealand - a bank owned by the New Zealand Post Office which provides a range of financial services including personal loans, bank accounts, business banking, and credit cards..
Germany also has a model of public banks known as Sparkassen.
The Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs is working with the Department of Finance to evaluate the community banking concept. It launched a consultation on the issue earlier this month. The notion of public banking is at a very embryonic stage so it could be years before it is introduced - if it ever is.
Sunday Indo Business