Finance Minister Paschal Donohoe has said he instructed his officials to contact AIB over its announcement to make 70 branches cashless, to make the bank "fully aware" of the furore.

The bank reversed the decision days later after much public opposition.

The minister appeared before the Joint Committee on Finance and was questioned by Sinn Féin finance spokesman Pearse Doherty about the Government's response to AIB's decision.

When asked whether he believed the move had caused reputational damage to the bank, the minister said it was a matter for AIB, in which the Government is a majority shareholder.

"It undoubtedly caused a very significant reaction to the bank that may over time have impacted on what their reputation is among their customers," he said.

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In response to questions from Mr Doherty about what communication he had with the bank, Mr Donohoe said he had instructed his officials to contact AIB chief executive Colin Hunt.

"Did I call Colin Hunt myself as it was developing? No, I didn't. Did my department contact them? Yes, they did." He said he had instructed his department to contact the bank.

"I acknowledged that this is a commercial decision that has been made by the bank and it is. And what my department did was made sure the chief executive and the bank was fully aware of the public reaction that was under way in relation to this, which at that point they were."

He added: "We were fully aware of what was happening, what the bank were saying. Equally at the same time my officials had contacted the bank to firstly acknowledge their independence but also to make sure they were fully aware of the public reaction to this."

Mr Doherty said Mr Donohoe could have done more in response to AIB's announcement and said it was the public's reaction that forced a U-turn on it.

"Deputy Doherty, whatever I do, it's never going to be enough for you," Mr Donohoe responded.

The minister accepted that Ulster Bank and KBC's withdrawal from Ireland "has, and will continue to have, wide-reaching impacts" as it leaves just three retail banks in Ireland: AIB, Bank of Ireland and Permanent TSB.