Customers of KBC Bank Ireland will begin receiving notice that they must begin closing their current accounts from the start of June, ahead of the lender's withdrawal from the Irish market.
Once they receive the notification, customers will have 90 days to shut their accounts, the bank said in a statement.
However, it also said customers do not have to take any action until they have been contacted by the bank and can continue to bank as normal until then.
The notification process will take place on a phased basis, it added.
Current accounts fall outside of the deal struck between KBC Bank Ireland and Bank of Ireland.
Under it, Bank of Ireland is buying €8.8 billion worth of performing mortgages, €100m worth of performing commercial and consumer loans, €4.4 billion of deposits and around €300m of non-performing loans.
"Current accounts are not part of the proposed transaction with Bank of Ireland and in order to wind down that business in a responsible manner we wish to give customers as much notice as is possible so that they can make the necessary plans while we prepare for our full exit from Ireland," said KBC Ireland CEO Ales Blazek.
"We will therefore be inviting industry participants to a briefing session at which we will share our detailed plans for the closure of current accounts in order to minimise impact on customers."
"We will be communicating with all current account customers to notify them and support them through this process."
The bank said that in order to assist customers it is putting a number of additional supports in place in its mobile app, contact centre and website to ensure that the process is as smooth as possible.
The timing of KBC’s exit is coinciding with Ulster Bank’s phased departure from the Irish banking system.
Ulster Bank has around 900,000 current and deposit accounts of which 360,000 are primary active personal current accounts.
KBC Bank Ireland has around 300,000 customers, of which around 130,000 are current account customers who actively use or have a balance in their account.
There are growing concerns in the banking sector and among regulators about whether the remaining financial institutions will be able to cope with the influx of new customers over the coming months.
Mr Blazek said the bank is fully conscious of its responsibilities to its customers and staff, understands the role it has played in the banking system and is fully committed to meeting its responsibilities as it exits the market.
KBC said it will not charge maintenance fees on current accounts from the point at which the notice to active customers of their account closure issued.
