AIB has reversed its decision to withdraw cash services from 70 branches following public and political backlash.

The bank announced on Tuesday plans to remove cash, ATM and cheque lodgement services from more than a third of its 170 branches to focus on account opening, financial planning, mortgages, loans, savings and investments.

AIB said that customers could instead withdraw cash at their local post offices, arguing that banking habits are "undergoing a huge transition as digital usage is soaring".

The majority state-owned bank has now abandoned the move, recognising that the decision had caused "customer and public unease" while offering a number of statistics to show the reasoning behind its initial announcement.

"In recent years there has been a dramatic increase in the use of digital banking services and a decline in branch visits and cash usage. In AIB’s case, there are 2.9 million daily digital interactions compared with 35,000 customer branch visits," AIB said in a statement.

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"There has been a 36% decline in cash withdrawals from ATMs and a 50% fall in cheque usage over the past five years. AIB has also seen a fall of almost 50% in branch over-the-counter teller transactions, while mobile and online payments have increased by 85% in that same timeframe.

"It was in the context of this evolving banking environment and the opportunity to enhance its long- standing relationship with An Post that AIB took the decision to remove cash services from 70 of its branches.

"However, recognising the customer and public unease that this has caused, AIB has decided not to proceed with the proposed changes to its bank services.

"The bank continues to retain its 170-strong branch network in its entirety and will also continue to offer banking services through its relationship with at An Post at its 920 post offices nationwide."

Welcoming the u-turn, Minister for Finance Paschal Donohoe said: "Banks have a key role in maintaining the flow of cash through the economy and ensuring appropriate access to retail banking services for all in society, including the vulnerable.

"I note the significant public reaction to AIB’s announcement earlier this week and I welcome the Bank’s decision not to proceed with the proposed changes to customer services in certain branches.

"We have seen many changes to our banking sector in recent years, driven by factors including advances in technology and changing consumer demand. It is against that background that I launched the Retail Banking Review to assess how the sector can be best positioned to meet current and future customer needs.

"I look forward to receiving the recommendations of the Review later in the year.”

At present, 22 AIB branches are cashless. Politicians from several parties also welcomed the decision.

(Pic: Leah Farrell/RollingNews.ie)