Ulster Bank to set six-month deadlines for a million customers to switch and close accounts

The letters mark an acceleration of plans by Ulster to withdraw from the Republic

A woman walks past the Ulster Bank headquarters in Dublin. File Picture: PA

Ulster Bank plans to start writing soon to 1 million customers setting them deadlines of six months to switch and close their current and deposit accounts with the lender. 

The letters will be sent on a rolling basis to avoid establishing a cliff edge because the current switching code overseen by the Central Bank will face unprecedented volumes for which it wasn't designed. 

The letters to customers mark an acceleration of the plans confirmed almost a year ago by the NatWest-owned Ulster to withdraw from the Republic. 

They will be sent to 916,000 personal customers who hold current and deposit accounts and to 70,000 commercial customers.           

Ulster Bank doesn't plan at this stage to write to its mortgage account holders because plans that involve it selling loans to AIB are under the scrutiny of a full probe by Competition and Consumer Protection Commission (CCPC). Ulster Bank's home loan plans involving Permanent TSB will likely also be fully investigated.                

“Ulster Bank is due to begin writing to customers shortly, giving them six months’ notice to choose a new current/deposit account provider, move their accounts and close their current/deposit accounts," the bank said. 

It also said it will set up a helpline to advise customers and has liaised with advocates of vulnerable customers to provide additional assistance. The bank also plans to meet with utility firms and other regular bill payment organisations. 

The current switching system was designed to boost banking industry competition by setting down a code that banks adhere to.

However, it wasn't set up to deal with the sort of volumes entailed in the closure of the third largest bank.                

It is also likely that customers will have to do a lot of work themselves, including checking that employers and government pension and welfare departments know of the new banking arrangements to ensure no interruption in the payments.                

The system will also have to cope with the closure of KBC Bank. 

The Belgian bank's decision to pull out of the Republic announced last year further rocked the industry here. 

KBC's plans to sell its home loans to Bank of Ireland is also the subject of a full investigation by the competition watchdog.    

On its website, the CCPC says its "top tip" under the current switching system is to inform employers or social welfare.                          

"Provide them with your new account details to make sure any future payments will go to your new bank account," the watchdog says.     

"You must complete this step yourself as your new bank can’t do it for you. The switching pack will have sample letters you can use to inform your employer about your new bank details," it says. 

The watchdog also says "recurring payments on your debit card" such as app and membership fees "don’t count as direct debits and won’t be moved over to your new account as part of the switching process".

Some customer banking advocates have written to the CCPC urging the watchdog to set conditions in the transfer of home mortgage loans to existing lenders.