The Department of Finance has said that no action needs to taken by depositors after the High Court directed that an auction of the deposits and corresponding assets of Anglo Irish Bank and Irish Nationwide Building Society could take place immediately.
The move followed an application by Finance Minister Brian Lenihan to the court and is the first step in the winding down of the two institutions.
Meanwhile, Anglo Irish is expecting to record another record loss for last year.
The sale of the deposits in Anglo Irish and Irish Nationwide is required as part of the agreement between the State and the EU and IMF.
In court earlier, Senior Counsel Bryan Murray for the Finance Minister said outside financial authorities were pressing very heavily for this transfer to take place as quickly as possible.
The Department of Finance has reassured depositors with both institutions that their money remains 'fully secure'.
But the Irish Bank Officials’ Association says today's decision runs against a previous expectation that the Irish Nationwide deposits would be transferred to one or more other Irish institutions.
Meanwhile, Anglo Irish Bank says it expects to report a loss of €17.6bn for 2010, a new record for an Irish company. More than €11bn of this is due to losses on loans transferred to NAMA.
Its figures also show a big outflow of money from the bank, with deposits falling from €27bn to €11bn during the year.
The amount of money it has borrowed from central banks almost doubled to €45bn.
Many of the financial details involved in the winding down application were kept confidential on the basis that they are commercially sensitive.
The fact that this application was being made could not be reported until Mr Justice Brian McGovern had made his order.
This was to prevent the application from triggering default clauses in certain bonds.
The court was told that the transfer of parts of the business of the banks might be said to be a cessation of business under the terms of the bonds but the judge's order overrides that possibility. Lawyers for RTÉ and The Irish Times were in court.
Senior Counsel Bryan Murray for the Minister said the application was to enable the re-organisation of the institutions and was essential to ensure their stability. It was also required as a condition of the EU and IMF programme of support, he said.
He said the external financial authorities were pressing very heavily for this transfer to take place as quickly as possible.
Mr Murray said Anglo and Irish Nationwide were continuing to act as destabilising forces in the financial system. He said it was very important this was dealt with as quickly as possible.
The auction of deposits was an attempt to preserve the financial position of the institutions by minimising losses in the future.
He said plans were in place to mitigate possible risks with this auction raised by the Governor of the Central Bank. These risks were not disclosed in court.
The agreement with the EU and IMF also involves Anglo closing its offices in the UK, Vienna, Dusseldorf and Jersey by 31 March and disposing of its wealth management division by 30 March.
The court was told that both Anglo and Irish Nationwide were consenting to the directions order.
It was intended to combine both institutions into a single bank, which would be 100% Government owned and this auction of deposits and assets at book value had to take place before such a merger.
The judge made the order and said that because this was a matter of exceptional public importance, redacted versions of the sworn documents and order should be made available to the media as soon as possible.
The Department of Finance said no action needed to be taken by depositors following the court's action, adding that depositors in both institutions remained 'fully secure'.
Anglo Chairman Alan Dukes, speaking in an interview with RTÉ News, said the staff in the bank who managed the deposits would be moving with those savings to a new institution.