Mr M from Dublin recently found himself in the unaccustomed position of being £200 over his overdraft limit on his National Irish Bank current account and being charged a £3.50 referral fee for every cheque or Laser transaction. Knowing he had to sort out his account quickly, he took £200 out of a savings account with another institution to deposit into his NIB current account. Unfortunately he hadn't reckoned with NIB's computer system, "which doesn't seem to recognise cash for what it is", he told Family Money.

Mr M was told by the NIB branch at College Green (not his branch) that it would take three working days to get the cash transferred into his own account the same period it takes for a cheque to clear an account. After getting on to his own branch and the NIB headquarters our reader was told that NIB's computer system was not equipped for the immediate transfer of cash from one branch to another, though they helpfully informed him that both AIB and Bank of Ireland can provide the service. To avoid any further referral charges, Mr M raced off to his own bank that afternoon and deposited the money. "It took an hour of my time not three days," he remarked.

The banks are quick enough to use the slow clearing time for money transfers to their own advantage: last April, the Sunday Times revealed how British customers who transferred money electronically from one account to another were not always paid interest on their funds during the three or four-day transfer period and were given no sensible explanation. Firms that monitor bank charges estimate that up to £200 million is lost by customers - and gained by the banks - because of the 30-year-old bank clearing system that operates in Britain.