ISME demands banks pass on interest rate reduction

ISME, the Irish Small & Medium Enterprises Association, while welcoming the one-quarter of a per cent reduction in interest rates announced last week by the European Central Bank (ECB) has demanded that the banks immediately pass on the full benefit to their small business customers and consumers. ISME Chief Executive, Mark Fielding, outlined: "The decision by the ECB should, in theory, bring some level of relief to many SME business owners who have bank term loans and overdrafts. However, the reduction in rates will only be effective if the lending institutions pass on the benefit in full, instead of their usual foot-dragging, maintaining the benefit for themselves instead of their customers". "It is essential that the reduction is passed on, especially as the banks have been consistently increasing the lending costs to unsuspecting customers over the last number of months, as recently evidenced by the decision of Bank of Ireland to increase business lending rates." In conclusion, Fielding warned: "If the banks refuse to do the right thing and fail to pass on the interest rate cut in full, the Government must compel them to do so, by introducing stiff sanctions."