The Central Bank has issued a statement in response to a report in today's Irish Times on AIB's stricter lending guidelines as a result of the impact of Covid-19. 

A spokesperson for the Central Bank said the decision to grant or refuse an individual application for mortgage credit is a commercial decision to be made by the regulated entity. 

"A loan offer may contain a condition that the lender can withdraw or vary the offer if in the lender's opinion there is any material change in circumstances prior to drawdown.

"In such cases, the decision to withdraw or vary the offer is a commercial decision for the lender," the Central Bank said.

Earlier this month the Governor of the Central Bank Gabriel Makhlouf said that banks had a role to play in supporting customers during the Covid-19 crisis but that they must do so "in a sustainable way". 

He also said he expected that banks would be making losses in the coming months and relying on built-up reserves.  

He described the financial system as "resilient" but added that that resilience was "not infinite".

In a statement, AIB said "at a time of unprecedented economic instability triggered by the Covid-19 pandemic, AIB considers it prudent to review its mortgage lending policies".

"It is imperative that the mistakes of the past are not repeated, that customers are not exposed to unnecessary risk and that their loans are sustainable," the bank added.

Earlier the new Minister for Public Expenditure and Reform, Michael McGrath, said that he was unhappy with the AIB move.

He said he will be following up on the issue.