Restrictions on banking remuneration should remain in place, including the €500,000 cap on an employee's annual pay, an Oireachtas committee has recommended.
The committee has also suggested that legislation be introduced to force retail banks to provide cash withdrawal and deposit facilities for customers within specified geographic parameters.
The Joint Committee on Finance, Public Expenditure and Reform and Taoiseach says the availability of physical bank branches providing cash services are a vital component of communities, businesses and households and should be appropriately available to all communities.
The topic is one of many analysed by the committee in its "Report on Banking 2022", following its hearings last year on a range of issues.
Last year AIB was forced to do a U-turn on plans to remove cash services from 70 of its 170 branches around the country.
The report says the legal requirement for banks to maintain cash services could be based on their customer distribution, market share and geographic coverage.
"Responsibility could be delegated to the Central Bank to review the coverage of current cash access and submit proposals regarding appropriate geographic baselines, with scope for periodic review in line with changing circumstances," it recommends.
"Responsibility for monitoring and enforcing compliance with these requirements could also be delegated to the Central Bank."
A similar suggestion to legislate for the provision of reasonable cash services was included in the Retail Banking Review produced by the Department of Finance last year.
"The attitude of banks toward communities by closing off ATM machines, by being cashless, by doing so in a cack-handed way as was the way with AIB, is simply not acceptable," said committee chairman, John McGuinness, as he launched the report today.
The study also firmly opposes the Government's decision last year to relax the pay restrictions on bankers.
It says the removal of the cap on pay and bonuses is inappropriate and that such a policy change could be "damaging to public confidence in the regulation of the sector and will not address longstanding customer issues."
"The Joint Committee recommends that the current restrictions on banking remuneration remain in place, including the €500,000 cap on an employee’s annual pay," it states.
Committee member, Pearse Doherty from Sinn Féin, said the opposition expressed in the report to the relaxation of the restrictions was significant for an all-party committee and should now inform the current Minister for Finance's policy decision moving forward.
"We are going in the wrong direction as you begin to allow banks to do as they wish in terms of pay and remuneration," said John McGuinness, whose party is a member of Government.
"And we’ve seen the results of that in the crash. So we need a different approach to banking remuneration and bonuses and so on. And the recent decision by the minister does not chime with my view on that."
The report says public trust in banking remains to be restored and expresses "significant concerns" at the culture within lenders as reflected in both the tracker mortgage scandal and the subsequent response by banks, even following evidence of the significant damage to customers.
Continued regulatory vigilance and cultural reform is necessary to ensure that those affected face no further damage or difficulty in respect of this issue, it says.
John McGuinness, added that some tracker mortgage cases have still not been resolved.
"And I would urge the banks to take whatever steps are necessary, to ensure that each and every tracker mortgage issue is dealt with fairly," he said.
The report of the committee also focuses in detail on the implications of the decisions by Ulster Bank and KBC Bank Ireland to wind down operations here.
It recommends that the Central Bank undertakes an analysis of the closure processes of both banks and the processes of the remaining banks in helping customers to migrate their accounts.
The report calls for Ulster Bank and KBC to publish ongoing reports detailing the number of customers that have been notified of their closure, the number who have switched and the number of customers who have yet to be contacted.
"Vulnerable customers should be provided additional supports and time to assist them in switching accounts," it also states.
The study concludes that the paper-based model used by the account switching code is not appropriate given the large number of customers who need to use it.
"The Joint Committee recommends that the Central Bank reform the switching code with payment service providers required to put in place automated and electronic methods and channels of communications, both between themselves and Direct Debit Originators," it says.
Mr Doherty described the switching process as out of date and practically useless for most customers.
Regarding rising interest rates, the committee expresses concerns that it will likely bring further pressures to households and businesses if passed on to customers.
As a result, it recommends banks consider the impact of any decision on their customers, especially given the current cost of-living and inflationary pressures.
Mr Doherty said the Government should be considering introducing targeted tax relief on mortgage interest payments and also said banks should be paying tax on their profits as they increase in a rising interest rate environment, instead of writing them off against historic losses.
The report also calls for the Central Bank to review differential pricing practices in the mortgage market, with recommendations to, if necessary, regulate their use to ensure good value for consumers.
It also recommends a range of measures be considered to improve switching in the mortgage market, including annual reminders from lender of their options and a requirement for lender to tell customers of cheaper mortgage options 90 days before their fixed rate ends.
The Financial Services Union welcomed the publication of the report, particularly the recommendations on staffing levels and that appropriate measures should be taken to address "the negative impact that uncertainty and precarity has had on staff".
"Access to cash, additional support for vulnerable customers and concerns expressed by the Committee over the handling by the main banks of the process to deal with the exits of Ulster Bank and KBC are concerns shared by the FSU and ones that we have highlighted for the last number of months," said general secretary, John O'Connell.
