The article by @Colmkelpie tells us that the BoI are taking our Central Bank to task over having the temerity to ask our bailed out b ankers for more information to be given to small and medium businesses when the b ankers refuse to give them credit.
Our boys in the BoI say that telling you the reason why they aren’t giving you a loan is going to delay the issuing of loans!!!!!!!!! It will also “impact on the speed of response” and the “perceived ease of doing business”. In a brilliant move they also state that it will….wait for it….. “deter market entrants”!!! These are the thousands of banks waiting to open in Ireland!!
We in ISME had asked the Central Bank to ensure:
- better communication from the lenders regarding their application process and timelines.
- clarity from the start of the credit application process about what information is required in order to avoid issuing further requests for information.
- more transparency around how ‘ability to repay’ is determined.
- reliance on the use of personal guarantees.
- sufficient clarity on the reasons for the refusal of credit facilities; and
- SMEs need to be made more aware of their right to an internal appeal or a review by the Credit Review Office (CRO).
The issue of timelines is also of particular concern to our members. The most recent ISME Quarterly Bank Watch Survey found that SMEs are waiting an average of just 4 weeks for an initial decision and another 3 weeks to drawdown. This is far too long and makes it difficult for SMEs to plan for growth.
We weren’t alone in our requests, the Joint Oireachtas Committee also recommended that responses to loan applications be within 2 weeks and that businesses are given a full breakdown of charges when opening a new account and when drawing down credit.
Intertrade Ireland also called for information on appropriateness and consistency of decline decisions.
What is really galling is the high moral ground being taken by the arrogant b ankers and their spokesmen. It really is a bit rich to hear them “blast” our Central Bank for requesting b ankers to be more open, while the banks themselves are on State assistance to the tune of billions.
Transparency and openness is not something b ankers would welcome in their continuing battle to regain their super-profit position.
While our b ankers might wish to forget, we in ISME will remember how our whole financial system lost its credibility, with customers being fleeced, shareholders being duped and international investors being hoodwinked by reckless and arrogant b ankers.
‘Never in the field of human banking was so much owed by so few to so many’.