DIFFERENCES of opinion within the Labour Party appear to be delaying a decision on the future of the TSB Bank. Informal proposals for the sale of TSB from the Minister for Finance, Mr Quinn, have not been approved by some members of the parliamentary party. It is understood that there is also some union concern about any sale.

Informal suggestions advanced by Mr Quinn involved the sale of TSB or the sale of the bank with the retention of a golden share bye the Government or the employees. Some of the proceeds were to be used to recapitalise ACCBank and ICC.

Because some of the problems behind the original plan for a third banking force involving the State owned TSB, ACC and ICC banks and the Post Office have receded or been resolved, there is now less political pressure to decide on the future of TSB. Improvements have included cheaper and wider access to the money transmission system, more competitive lending conditions and better access to business loans.

New chairpersons have been appointed to ACC and ICC banks with briefs to develop the banks. The Government is unlikely to stand in the way of ACC taking a strategic partner in order to increase its rate of growth. ICC is understood to be concentrating on expanding its role as a development bank, providing funds for small and medium sized industries.

To improve the market for personal customers, the credit unions are to get clearance to expand into new areas of business and the Post Office is expected to have a full computer system in 600 branches by Christmas.

The issue of the future of TSB was raised two and a half years ago. On April 29th, 1994, the TSB trustees asked the Government to approve the sale of the bank to National Australia Bank. But TSB Bank was included in the plans of the Government of the time to establish a third banking force to compete with the main banks. Consultants were appointed to advise on the options in relation to the State owned banks and TSB.

Ulster Bank and the Irish Nationwide Building Society also expressed an interest in TSB, but there was no Government decision on its future.

With the Minister for Finance now heavily involved with Ireland's EU Presidency, European monetary union issues and preparations for the estimates, the sue of the TSB appears low one political agenda.