The group representing small and medium enterprises is calling for the Central Bank to examine the lending practices of Irish banks.
A survey carried out by ISME has revealed that banks are continuing to refuse lending to a majority of business applications.
It also found that banks are illegally asking for family homes to be put up as collateral for loans.
The Irish Banking Federation (IBF) has rejected the criticism saying it seriously questions the authority and accuracy of the research.
But ISME Chief Executive Mark Fielding says the Government calling for banks to increase lending has fallen on deaf ears putting thousands of businesses and their employees at risk.
“The Irish financial system has been in danger of loosing all credibility with the banking system fleecing customers, shareholders were being duped and international investors were being hood-winked” he said.
“The reckless and arrogant bankers that were involved in this need to be brought to boot”.
“We really do need the government to crack the whip here” he added.
