Irish households withdrew deposits at a slower annual pace in September but insurers and pension funds upped their withdrawals meaning that overall Irish private sector deposits were down 10.5 percent year-on-year compared to a 10.4 percent fall in August, central bank figures showed on Friday.

Irish consumers, companies and pension funds have been withdrawing cash from Irish-based banks for the past year but the rate of decline in household deposits fell to 4.7 percent year-on-year in September from a 5.4 percent fall the previous month.

The rate of decline in deposits among pension funds, insurers and non-bank financial institutions rose to 22.9 percent year-on-year in September from 20 percent in August.

In September, Irish resident deposits rose by 485 million euros, the largest net monthly increase since December 2010 but this was offset by a decline in deposits by businesses which fell by 420 million euros that month.

Ireland's government is hoping the latest recapitalisation of its banks, which was completed in July, will restore investor and customer confidence, reverse deposit outflows and reduce the sector's reliance on loans from the European Central Bank (ECB).

Overall, banks based in Ireland had 100.36 billion euros of outstanding loans with the ECB at the end of September, of which 71.1 billion was held by the country's domestic banks, up from 70.5 billion a month ago.

After years of reckless lending, Irish banks have sharply cut the supply of credit to consumers as they seek to maintain their capital bases and the annual rate of decline in loans to households was 4.0 percent in September, unchanged from a month earlier.

(Reporting by Conor Humphries; editing by Carmel Crimmins)