The Central Bank has fined Ulster Bank almost €2 million for failing to hold sufficient levels of cash and capital reserves.

Between January and September of 2011 the bank breached rules on the management of its cash flow and also the amount of capital it held to cushion losses on its property book.

A settlement of €1.96 million has been reached effective as of last Wednesday.

The bank said it a statement that no customers were impacted by the breaches and that it received a capital injection from its parent company RBS to rectify the issue.

Liquidity offences

The Central Bank says Ulster Bank committed 5 offences relating to liquidity and capital requirements.

The body says the penalties were imposed to reflect "the importance the Central Bank places on compliance with prudential requirements for credit institutions".

The Central Bank has also confirmed that the matter is now closed.

It has also issued a general comment from Director of Enforcement Peter Oakes.

"This is the first settlement by the Central Bank with a firm for contraventions of capital requirements and the third for contraventions of liquidity requirements" he said.

"This enforcement action and the penalties imposed reflect the importance the Central Bank places on compliance with all aspects of key prudential requirements regardless of whether or not contraventions of core Pillar I minimum capital requirements or liquidity ratios arise" he added.