KBC Bank Ireland said it has decided to extend the notice period for the closure of current accounts from 90 days to six months.
The move brings it in line with Ulster Bank, which is giving customers six months to move their accounts, and comes days after the regulator told banks that they need to do more to ensure switching customers are catered for.
KBC said it will start sending out the first batch of account closure notification letters in June and these customers will have six months to close their accounts.
Letters to customers will issue on a rolling basis over the course of the remainder of this year and into early 2023, the bank added.
KBC said it will provide reminders to customers during this period through a combination of letters, emails and SMS messages.
"It is the bank's intention that the closure of all accounts is managed in a careful and efficient manner keeping customers informed throughout," it stated.
KBC Bank Ireland said it understands the crucial importance of a current account in the financial daily lives of its customers.
"We understand that changing banks involves significant time and effort on behalf of customers and it is our intention to support them throughout that process," it added.
It also said it was fully aware of the apprehension around the volume of customers that will be seeking to open new current accounts and the challenge to the market that presents.
"It is our determination to meet our responsibilities and to minimise to the greatest extent possible, the inconvenience caused to our customers," it stated.
On Wednesday, the Central Bank told lenders here that they need to do more to ensure that Ulster Bank and KBC Bank Ireland customers are catered for when the two banks leave the country.
About 900,000 retail accounts are expected to move over the next year by customers of the two banks.
However, there are growing concerns that the sector is not sufficiently prepared to cater for the huge movement of customers, amid evidence of long-waiting times for in-branch appointments and to access call centres.
KBC Bank has about 130,000 current accounts that are either active or have a balance and it estimates that 52,000 of these customers are expected to need to open a new account or move to a new provider.
97% of KBC's active current account customers mainly bank digitally with KBC through its online banking or mobile app.
The Belgian bank announced last year that it was leaving the Irish market.
Brian Hayes, the chief executive of Banking and Payments Federation Ireland, has welcomed today's announcement from KBC Bank Ireland.
"They are giving more time to their customers, and indeed that is going to help the remaining banks deal with trying to find new homes for these accounts," Mr Hayes said speaking on Morning Ireland.
He said the Central Bank has recognised the logistical challenge that is about to occur when it comes to switching accounts.
"They have recognised that a huge amount of work is going on across the exiting and the remaining banks," he said.
"I've said from the beginning that this will be a marathon, not a sprint - we are going to get there," he added.
In the first three months of this year, Mr Hayes said AIB, Bank of Ireland and PTSB have opened over 105,000 new accounts.
That is before the banks recruit additional staff, he said.
"We are going to see a significant uptick in that number going forward. But we need the help of everyone here, and especially the direct debit originator section of the market," he said.
"Underlying half a million current accounts is seven million transactions that customers do in direct debts and standing orders," he stated.
Mr Hayes said the Central Bank has recognised that this is an issue that needs to be addressed.
"I would call on other regulators to do the same thing," he added.