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You must lend, AIB told

AIB chiefs were grilled by Government ministers last night over their failure to lend enough money to support business.

Bank chairman Dan O'Connor and chief executive Colm Doherty met Finance Minister Brian Lenihan, and Enterprise Minister Batt O'Keeffe, to discuss the findings of regional meetings held by Government representatives with business bodies.

One of the main findings was that AIB were not living up to their lending commitments that small and medium-sized businesses were being pushed to the limit by AIB's failure to give loans to support their day-to-day activities.

It was made clear to the bank last night at the meeting at the Department of Finance last night that if they were to be bailed out by NAMA they must support small and medium businesses.

If the banks do not lend, "our recovery will be paralysed and we are determined not to allow that to happen", said Mr O'Keeffe.

"The Government has statutory powers to compel banks covered by the National Asset Management Agency legislation to lend. The Minister for Finance has power under Section 210 of the NAMA Act 2009 to issue guidelines with which NAMA banks must comply," he added.

"The Government will monitor very closely the banks' progress under the lending plans and any indication that there are unexpected problems with a particular sector or region will be investigated."