The regulator warns that Ulster and KBC will not be able to leave Ireland unless there are replacement services for customers

The regulator warned ULSTER Bank and KBC Bank Ireland that they will not be able to exit this market if replacement banking services are not put in place for their customers.

The central bank has told outgoing banks it will step up its supervision of planned exits, in what has been described as a massive disruption to financial services.

And a new steering committee made up of the banks and the regulator will be created to handle the massive swap and account closure operation.

The move comes after the central bank was recently heavily criticized for what is seen as a low-key approach to impending exits.

The Consumers Association had urged her to “stick the finger out” and do more to prevent the closures from becoming a “disaster”.

The Central Bank was told to set up a steering committee to coordinate the closing of checking and deposit accounts and to help consumers open new accounts. One million accounts are affected.

Now the central bank’s director general for financial conduct, Derville Rowland, has insisted the regulator is “assertively monitoring banks” during what it says are profound structural changes taking place in the retail banking landscape.

He said outgoing banks had done a good job, but insisted more needs to be done.

His colleague, the Central Bank’s director of consumer protection, Colm Kincaid, has written to KBC and Ulster Bank, along with the three remaining banks, asking for a “round table” committee of the banks.

It warned banks to establish new banking agreements for affected customers in a timely manner.

This is to “ensure that consumers maintain continuity of banking services at all times.”

“The Central Bank will continue to follow up on this matter as account migration progresses and will intervene to the extent of our powers where this expectation is not met.”

The reference to the regulator’s intervention is understood to mean that it will block the full closure of KBC and Ulster Bank if their customers have been left without banking services after the account closure deadlines have passed.

The Central Bank also warned that outgoing banks have a duty to ensure customers have new banking services before closing.

The letter to the CEOs of the five retail banks warns that customers affected by the closures should be given adequate advance notice of plans to close their accounts.

Agreements for continuity of service must be established for customers, and banks must help vulnerable customers.

The closings represent the largest bank-switching exercise in state history.

The average customer has up to 10 direct debits and direct debits per month, which must be transferred individually to another bank.

Around seven million separate direct debits, recurring card payments and credit transfers could be affected by the massive movement of customers to new providers.

Last week it became known that people looking for a new bank cannot open a credit card account and get overdraft service.

Customers applying for an overdraft or a card with a new bank face lengthy delays as they have to undergo credit checks. Many are likely to be rejected.

In many cases, those who want an in-person date are given a date weeks and sometimes months away.

Michael Kilcoyne, chairman of the Irish Consumers Association, had said the mass closure of accounts was turning into “chaos” and had urged the Central Bank to intervene.

“Bridges are being put in the way of consumers opening new accounts and the regulator needs to step in,” he said.

Those looking to transfer to a bank where they can use an overdraft must have operated their new account for three months before they can apply.

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