Mr Charles Haughey told senior AIB officials at a lunch meeting in 1976 he wanted his debt of more than £280,000 to remain outstanding "indefinitely", with no specific arrangement regarding repayment, the Moriarty tribunal was told.
When Mr Haughey was told this proposal had "absolutely no appeal to the bank", he was "very disappointed", according to the former regional manager, Mr Michael Kennedy.
The tribunal was told that in 1975 Mr Kennedy was appointed regional manager of the AIB Dublin west region, which included the Dame Street branch, where Mr Haughey's account was held.
Mr Kennedy said he was aware of the difficulties the bank experienced in managing Mr Haughey's account and first became involved with this matter in September 1976.
Mr Kennedy was asked to attend a lunch on September 14th with the then chairman of the bank, the late Mr E.M.R. O'Driscoll, the bank's secretary, Mr Derek Moyter and Mr Haughey. The lunch meeting took place in the AIB branch in Dame Street.
Mr Kennedy said he could not recall the purpose of his attendance, but presumed this was so that he could be "a witness" to what was discussed.
After the lunch there was some "general conversation" and then the issue of Mr Haughey's debt was raised, according to Mr Kennedy. He could not specifically remember who raised the subject, but assumed it had been Mr Haughey, because it looked as if Mr Haughey had "wanted to make representations" about his account.
Asked by Mr John Coughlan SC, for the tribunal, as to the background to the lunch, Mr Kennedy said he was not aware of the details and could not recall whether he had been to such a lunch before. However, he said it was "fair to say" he had never attended another lunch meeting of this kind.
Mr Haughey's proposal was that his debts be allowed to remain outstanding indefinitely, without any specific arrangement regarding repayment. In response, Mr O'Driscoll told Mr Haughey this suggestion would have no appeal for the bank, according to Mr Kennedy.
Mr Coughlan asked whether it was put to Mr Haughey that he should attempt to put his accounts with the bank in order. In reply, Mr Kennedy said he could not recall this.
Following Mr O'Driscoll's rejection of Mr Haughey's proposal, Mr Haughey was "very disappointed", according to Mr Kennedy.