AIB has rolled back its decision to impose charges on contactless card transactions from the end of May, after the majority State-owned bank came under pressure to help reduce cash transactions to fight Covid-19.

Paschal Donohoe, the Minister for Finance, said on Friday he planned to raise the issue with the bank, which subsequently said it is “suspending” the move.

Meanwhile, AIB has been criticised by the Restaurants Association of Ireland (RAI) for refusing to commit to extra forbearance measures specifically for struggling operators in the stressed hospitality sector.

Restaurants and other hospitality businesses have witnessed a near-total collapse in demand as customers stay home with the Covid-19 lockdown. The industry group warned of “thousands” of job losses beginning this weekend.

Adrian Cummins, chief executive of the RAI, spoke with AIB’s head of SMEs, Rachel Naughton, on Friday to directly appeal for extra forbearance measures for his members.

Specifically, he sought a commitment that restaurant owners in loan arrears who had given personal guarantees would receive a grace period of up to six months before the security was enforced. He said AIB did not give the commitment. The bank insisted on Friday night that it “is a committed backer of the hospitality sector” and suggested more help may yet be forthcoming.

Difficult

“Clearly the sector is facing a particularly difficult situation, and we have a range of solutions in place, including cash flow and working capital ... We listen to the concerns of representative bodies ... We are resolute in our determination to support hospitality businesses through the ongoing situation,” said AIB.

Mr Cummins also urged the Government to immediately introduce a specific package of supports for the sector: “Thousands of workers are being laid off as we speak. A specific aid package needs to be in place by Monday.”

RAI called for measures including a delay of VAT payments and deferments of loan repayments to banks.