He was severely criticised as it was confirmed it will be another nine months before thousands of borrowers get repaid and compensated and before he is willing to consider sanctioning the banks.

Mr Donohoe criticised the “disgraceful” behaviour of the banks and “hurt” caused to borrowers — but decided against any immediate sanctions against lenders.

Under a deal with banks, 12,000 customers overcharged will be paid back and compensated by the end of the year, while the position of thousands of other disputed cases must be decided by December.

The five core banks all apologised unreservedly to the affected customers in a series of statements released yesterday.

However, despite demands by government partners Independent Alliance and others for gardaí to intervene, Mr Donohoe ruled this out and said a Central Bank probe was under way.

He will now receive two reports from the Central Bank, one in December as to the banks’ progress and one in March on ‘banking culture’ and only then will he consider taking action.

Options that are open to the Government include raising the bank levy, vetoing the reappointment of board directors with state banks or the amounts they get paid, or ordering stricter reporting rules.

The minister said compensation levels for customers were being set by the Central Bank and he was happy with the powers the regulator had.

In a series of co-ordinated updates on the scandals, the banks revealed:

Over 14,982 affected customers have been identified in reviews of trackers since 2015, but less than 3,500 have been compensated.

7,100 borrowers were found to have been impacted in an earlier examination taking the total number of confirmed cases to 22,082.

There are potentially up to another 7,000 disputed cases yet to be agreed upon.

Of the five banks, Ulster Bank has set aside €175m to cover compensation and redress; AIB €190m; and KBC up to €60m.

Mr Donohoe in a press conference said: “The Government believes that the behaviour of the banking sector in relation to tracker mortgages was disgraceful. This is a scandal.”

The minister, refusing to identify specific lenders, said the Central Bank was of the view that some bank behaviour up to now had been “unacceptable and “legalistic”.

He said the banks had now pledged that the majority of affected customers already identified would receive redress and compensation by the end of the year.

Banks must now comply with new deadlines, said Mr Donohoe, and banker bonuses at this time would not be adjusted.

But the Dáil last night heard criticism of the Government’s limited response. Opposition TDs demanded a criminal investigation into how borrowers were systematically robbed of low-cost interest rates.

Fianna Fáil’s Michael McGrath

During a debate on the scandal, Fianna Fáil’s Michael McGrath said: “The bankers who caused this will sleep well tonight, while those affected will continue to have sleepless nights, they are stuck in a nightmare”.

The Government had failed to issue a clear deadline for all repayments and had also given no indication of how cases of repossessed homes should be treated, added Mr McGrath.

Party colleague Niall Collins declared the Government response a “charade”.

Oireachtas Finance Committee chairman John McGuinness said the Government was “dealing with thieves” and accused Mr Donohoe of being the “getaway driver” for the bankers.

Sinn Féin’s Pearse Doherty said the minister had been treated like a “fool” by banks who perpetrated the “biggest robbery” in the State.

Sinn Féin’s Pearse Doherty

Bank findings

Ulster Bank

3,500 customers affected.

1,000 to receive repayments/redress by end of year.

Remaining 2,500 to get repayments/redress early 2018.

Permanent TSB

1,971 customers affected.

All offers of redress to be made by December 31.

KBC Bank

571 customers identified in 2010 and rectified.

Further 490 have been identified.

Repayments and redress to begin next month.

AIB

3,416 customers affected.

12 customers lost their home.

All redress and compensation to be paid early 2018.

Bank of Ireland