A Minister of State says the first he heard about AIB going cashless at 70 branches was on the news.
Fianna Fáil TD Robert Troy was speaking amid reports that Government was told about the plan four days before it was announced.
He told Down to Business he was not privy to any such advance information.
"I certainly didn't know about it - the first I heard about it was when it was reported on the news.
"But it does raise concerns that senior officials knew about it and didn't think it was their place to inform their management, which is their ministers.
"That gives rise to, I suppose, a concern of how senior public service [sic] maybe carries out their duty if they don't feel that it is important to relay key information such as AIB - who we are the major shareholder in - taking a decision to... go cashless in 70 branches."
He says the situation was handled "appallingly bad and it showed no regard for their customers in terms of the lack of engagement or consultation".
However he believes it could have positive implications for the post office.
"I actually felt that it was going to be a lifeline to the post office network, which is obviously finding it very difficult to survive, by moving a large part of banking services to the post office network.
"And I don't think that should be lost going forward".
But he says they will have to tread carefully in the future.
"I would like to see them do more - but we have to, I suppose, recognise too that there is a cohort of people who don't ever go near a bank or a post office either.
"They do all their banking online... you're moving away from cash.
"But at the same time we have to ensure that people who aren't ready, or aren't competent enough to move away, have the services available to them also".
While Roscommon-Galway TD Denis Naughton is calling for another commercial bank to be set up in Ireland to compete with existing banks.
"I believe that that needs to be established by the State using the two existing State banks, the Strategic Banking Corporation of Ireland and Microfinance Ireland - combined with the Post Office network and the Credit Union network - to provide a viable alternative in communities right across this country so that people have access to financial services, regardless of where they live.
"This decision yesterday by the AIB to reverse their decision was the right and correct decision to make.
"But it also highlights the need for another commercial bank in this country that can compete with the existing banks", he said.
