Role of Banking in Ireland

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Role of banking in Ireland

Banks are monetary institutions governing payment transactions in cash and non

cash form. Main purpose is to serve as financial intermediaries, accumulating

temporarily free funds and public companies and transmitting them in the form

of loans to borrowers.

Banks in Ireland provide a broad range of services to personal, commercial,

industrial and agricultural sectors. The main services provided are:

Overdrafts, Loans (cash credit, demand loans, short-term loans), mortgages,

deposit services (current deposits fixed deposits, saving deposits), international

asset financing, leasing, debt financing, foreign exchange facilities.

Banks also offer telephone and online services for its customers.

Associated and non associated banks

Associated banks are similar to commercial banks, in that they offer retail and

day to day cash services to both businesses and consumers. They have the

additional role in being a member of a corporation providing a clearing system

for all other banks and many affiliated with a bank card system such as VISA or

MasterCard Int. A clearing house provides payment, clearing and settlement

services to its member banks and other financial institutions.

The Central Bank Act 1992 named 8 Irish Associated Banks the main 4 are:

The Bank Of Ireland, The Ulster Bank, The Hibernian Bank, The national Bank.

Non associated Banks include non-retail banks such as Merchant Bank and

Investment Banks.

PREMIUM HANDLING3.46 An insurance intermediarymust lodge money it receives in respect ofa premium or a premium rebate to a segregated bank account. Each suchaccount must be designated Client Premium Account.

3.47 An insurance intermediarymust operate separate client premiumaccounts in respect of life and non-life business.

3.48 A regulated entitymust ensure that all payments from a clientpremium account clearly state that the payment emanated from a clientpremium account.

3.49 A regulated entitymust ensure that a client premium account is neveroverdrawn.

3.50 The following are the only debits and credits that may be passed

through a client premium account:


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a) Credits (money in)

i) money received from the consumerin respect of the renewal of a policy,which has been invited by an insurance undertaking, or a proposal forinsurance accepted by an insurance undertaking;

ii) money received from a regulated entityrepresenting premium rebatedfor onward transmission to the consumer;

iii) transfers from another client premium account operated by theinsurance intermediaryfor the same form of insurance;

iv) transfers from the insurance intermediarys office account to allow abuffer amount to be maintained in the client premium account (any suchtransfers must be clearly identifiable);

v) proceeds received from a regulated entityin respect of the settlement of

a claim for onward transmission to the claimant;vi) bank interest, if appropriate; and

vii) where mixed remittances are received, the total amount must first belodged to the appropriate client premium account.

b) Debits (money out)

i) money paid to a regulated entityon foot of renewal of a policy, which hasbeen accepted by an insurance undertaking, or a proposal, accepted by aninsurance undertaking;

ii) money paid to a consumerrepresenting rebates of premiums received

from insurance undertakings;iii) commissions and fees paid to the insurance intermediaryfor whichthere is documentary proof that the funds are properly due to the insuranceintermediary;iv) transfers to another client premium accountoperated by theinsurance intermediaryfor the same form of insurance;

v) payments of claims settlement amounts to a consumer;

vi) bank interest, if appropriate;

vii) the portion of mixed remittances that does not relate to a premiumpayment. Such remittances should be transferred to, or to the order of, theconsumerwithout delay; and

viii) payments in respect of charitable donations, in accordance with Provision7.2.

3.51 An insurance intermediarymust carry out and retain, on a monthlybasis, a detailed reconciliation of amounts due to regulated entities withthe balance on each client premium account it operates.

PRODUCT PRODUCER RESPONSIBILITIES3.52 In relation to a new investment productdesigned by aproduct

producerto be sold to consumers, theproduct producermust providethe following details to an intermediary:

a) the key characteristics and features of the product;


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b) the target marketofconsumers for the product;

c) the nature and extent of the risks inherent in the product; and

d) the level, nature, extent and limitations of any guarantee attaching to theproduct and the name of the guarantor.

3.53 When selling an investment productto consumers through anintermediary channel, aproduct producermust provide information to theintermediary about the investment productthat is clear, accurate, up todate and not misleading, and includes the information outlined in Provisions3.52 and 4.46.

3.54 Theproduct producermust provide an ongoing facility to theintermediary to ask questions and obtain information on an investment

productin relation to which information is provided to the intermediarypursuant to Provisions 3.52 and 4.46. Theproduct producermust:a) provide this facility to the intermediary for the duration of the period in

which that product is offered for sale by theproduct producer; andb) inform the intermediary of his or her right to that ongoing facility.

3.55 Within the first year of launching an investment productwhich is soldto consumers, and at least annually thereafter, aproduct producermustupdate the information required under Provision 3.52 and provide thatupdated information to the intermediary.3.56 A regulated entitymust maintain a publicly accessible register of allmortgage intermediaries to which it has issued a current appointment.3.57 Upon the termination of the appointment of any mortgageintermediary, a regulated entitymust provide to the Central Banka

confirmation, on paper or on another durable medium, that suchmortgage intermediaryhas been removed from the register maintainedunder Provision 3.56.

Documents

Role of Banking in Ireland