The Central Bank will impose tough new targets on lenders to deal with mortgage customers struggling with arrears.

As part of a wide-ranging plan announced today the main banks have been told that they must meet the targets or face having tougher capital measures imposed on them - a move that could restrict what they do.

Under the plan AIB, ACC Bank, Bank of Ireland, KBC Bank, Ulster Bank and Permanent TSB will have to offer long-term sustainable loan restructuring to 20% of their customers more than 90-days in arrears by the end of June.

By the end of this year long-terms deals will have to be offered to half of the banks' struggling borrowers.

No wide-spread debt forgiveness

According to Central Bank figures published last week, just under 100,000, or 12%, of mortgage accounts were more than 90 days in arrears by the end of the December.

The bank is not specifying the options to be put to borrowers but says lenders must accept the reality that some people are insolvent and that short-term interest only forbearance measures are not working. There will however be no widespread debt forgiveness for those in debt.

The Central Bank is keen to see so-called split mortgages being offered to customers. This would see those in arrears repay the part of their mortgage they can afford while the remaining debt would be parked for several years.

It is also expected that a legal loop-hole that is preventing banks from seizing homes will change and that a significant increase in repossessions will happen.

The Central Bank is also changing its rules on the amount of contact banks can have with customers behind on their payments. That's currently restricted to three phone calls but that will be scrapped to prevent strategic loan defaulters.

The plan was discussed in the Dail earlier: