Banks refuse to pay full cost of armed cash escorts

BANKS will pay an extra €2 million towards the cost of garda and army escorts for moving cash next year, but the taxpayer continues to foot the bulk of the bill.

Despite the financial institutions making billion euro profits, the banks are still refusing to meet the full costs of transporting cash to branches around the country.

Just two days' profits from the two main banks would cover the entire cost of the security escorts.

Between them AIB and Bank of Ireland made over €2 billion in profit in 2002. Yet of the cost of around €13m for providing the escorts next year, the five big banks will pay just €5.8m up from the €3.8m covering 2003.

The banks are resisting attempts by the Government to increase the contribution even further over the next two years, pointing out that renegotiated charges have previously stayed frozen for a number of years.

While the cost of the escorts has increased significantly over the years, the banks have only been giving €950,000 to the Garda Síochána since 1995 for an average of 44 escorts a week less than a quarter of the actual cost of man-hours and transport incurred by the gardaí.

After Justice Minister Michael McDowell ordered his officials to get the banks to pay a larger share of the costs, the financial institutions agreed to raise their contribution to €3m.

The banks will also continue to give €2.8m to the Department of Defence to meet part of the costs of the army's involvement.

The renegotiation of the deal sees the gardaí receive the larger slice of the banks' contribution for the first time. But the Department of Justice wants the banks to gradually raise its contribution to €5m by 2006, so that over a four-year period the banks would pay €17m rather than just €4m.

The banks argue that their contribution is fair and comes on top of the €300m levy over three years on the banking sector set by Finance Minister Charlie McCreevy.

The five high street banks AIB, BoI, Ulster Bank, National Irish Bank and Permanent TSB pay the contributions through their representative body, the Irish Bankers' Federation (IBF).

The IBF says the State itself is the single greatest generator of cash in the economy, from a range of payments and benefits, while the financial sector's preference is to reduce the cash in circulation.

Rejecting the argument that banks should pay more because of their high profit margins, the IBF spokesman said this was a misplaced suggestion.

"Every business is entitled to be able to conduct its business in relative security," the spokesman said.

According to a spokesperson for Mr McDowell, the department is keeping the matter under review.

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