DUBLIN - THE Irish government said on Wednesday it was injecting seven billion euros (S$14 billion) into the country's top two banks, Allied Irish Bank (AIB) and Bank of Ireland (BofI).

They will each receive 3.5 billion euros to secure their position 'in view of the continuing turmoil in global financial markets,' Finance Minister Brian Lenihan said, in return for shares with a fixed dividend.

AIB and BofI have as part of the deal agreed to boost lending, hold back on taking court action against home owners having problems paying their mortgages and also to cut the pay of senior bank executives.

The proposed cash injection is a significant increase on the terms of the bank recapitalisation plan announced in December, when Mr Lenihan said both AIB and BofI would receive two billion each of taxpayers' money.

Under December's scheme, the government also planned to inject 1.5 billion euros in Anglo Irish Bank, but last month ministers decided it was not enough and said it would nationalise the institution.

No such plans were in place for AIB and BofI, Mr Lenihan stressed on Wednesday, saying: 'The state does not intend to take control of these banks.' -- AFP