Bank of Ireland is reportedly set to be the first domestic Irish bank to charge customers who deposit large amounts of money with the lender.

According to the Irish Times, the bank has told its larger corporate and institutional customers it plans to implement a negative interest rate on deposits of €10m or more from October.

It is reported an interest rate of -0.1% will apply to such deposits.

In a statement to RTÉ News, Bank of Ireland - which is still partially State-owned - said: "We don't comment in relation to our pricing but we keep all our rates under review".

Diarmaid Sheridan from Davy said while we are unsure of "the specific deposit accounts to which the charge will apply, we assume that it will be applied to overnight and shorter duration deposit accounts".

At the end of June, Bank of Ireland held €11.7bn of deposits in its Corporate and Treasury division, with the average balance during the first half of the year held in current accounts in this division amounting to €1.2bn - with an average of €7.7bn held in interest bearing accounts.

The reported development follows changing policies at the European Central Bank in recent months, whereby the institution began charging lenders across the euro zone a 0.4% fee to deposit funds with it overnight.

Other lenders across the euro area have already begun introducing negative rates for larger depositors, however, the reported move by Bank of Ireland would make it the first Irish-owned financial institution to begin doing so.

AIB and Permanent TSB have both said they have no plans to follow suit.

Negative interest rates on deposits are designed to encourage more spending in the economy, which in turn helps to boost inflation.

The euro zone has been struggling with low inflation rates of around 0.2%, with the ECB attempting to raise this closer to its 2% target via a number of stimuli - including negative deposit rates and a rock-bottom base interest rate of 0%.

Last month, Bank of Ireland reported a pre-tax profit of €557m for the six months to the end of June, down from €725m in the same period in 2015.