Bank offering customers ATM overdrafts of €700

Bank of Ireland has become the first Irish bank to allow its customers to immediately get an overdraft of up to €700 through …

Bank of Ireland has become the first Irish bank to allow its customers to immediately get an overdraft of up to €700 through its ATM machines.

Customers pre-approved by the bank will be offered the overdraft facility when there is insufficient funds to meet a withdrawal request - and will be able to complete the process in less than a minute.

The bank has added this service to the range already offered through cash machines and estimates it will take between 30 and 60 seconds to complete the application process.

Certain customers will be prompted to apply for this loan if there are insufficient funds in their account when they are trying to withdraw money.

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Announcing the new initiative yesterday, Bank of Ireland said the monies were being offered as a "cushion" for certain customers who need extra cash.

"It is another important step in achieving Bank of Ireland's goal to be the most accessible lender in the country, while adhering to its normal prudent lending criteria," it said yesterday.

Those who can expect to find this amount of money immediately transferred into their current accounts will be the 60 per cent of Bank of Ireland customers who have already been pre-approved for loans. The bank has sent out details of pre-approved loans to its customers, based on an analysis of their bank accounts rather than on applications from the customer.

Customers will be asked to accept the terms and conditions attached to the overdraft, including the 13.5 per cent rate of interest charged as well as the normal ATM transaction fee. They will also agree to pay the annual overdraft facility fee of €15.20.

The service will be available on Bank of Ireland cash machines at bank branches but not at machines located at various shops and retail outlets.

The bank's personal loans marketing manager, Mr David Slattery, said that "sensible" borrowing and responsible lending went hand-in-hand wherever the offer was made.

Bank of Ireland piloted the service for seven weeks during the summer.

Of the customers who took up the overdraft offer, 63 per cent took less than 30 seconds to complete the transaction and 90 per cent took less than one minute.

"The result of the pilot indicates that most customers were glad to be offered an overdraft rather than having to ask at the bank," he said.

Overdrafts are among the most expensive type of credit offered by financial institutions. Customers are always advised to examine carefully the terms and conditions attached to these offers.

Consumer groups and the Irish Financial Services Regulatory Authority are likely to closely monitor its take-up.