The bank has argued that more of its services can be moved online as Ireland increasingly moves towards a cashless society.
However, Deputy Healy Rae said his phone has “been on fire” with messages from concerned constituents as many will have to travel huge distances to withdraw money.
“This is a devastating blow, not just to the business community but to everybody because our banks provided a service that we appreciated, we wanted but we also bought into,” he told The Pat Kenny Show.
“What I mean by that is that all of our memories haven’t gone too short that we can’t remember the way that we the public bailed out AIB and made sure they were left in a position that their doors were open and their lights were on.
“We bailed them out, it’s our bank.”
Although AIB is partnering with local post offices to help with the transition Deputy Healy Rae believes they do not provide a realistic alternative to the local bank branch.
“I of course welcome business to our post offices but not in this way because to be fair, the post offices close at half five in the evening,” he continued.
“So while I appreciate and value the work of our post offices, it’s not going to be compensation enough for the services that we had through AIB.
“And I really feel hard done by that we bailed them out and now they’re abandoning us.”
One businessman said pensioners in particular are not ready for a cashless society.
“As the old saying goes ‘Cash is always King!’” Jonathan Powell of Clifden Bike Shop in Galway told Newstalk.
“People still have cash in their pockets, the older generation they all deal with cash.
“It is, obviously, greatly reduced but it is still around.
“It seems like a crazy absurd situation that they’re putting themselves in,” he concluded.
In a statement AIB said: "With digital usage soaring, the cost of providing cash services has become increasingly unsustainable.
"As a result, cash, ATM and cheque services will be removed from these branches but customers will continue to have efficient access to cash in their communities."
"This will enable the bank to provide additional account-opening facilities as Ulster Bank and KBC leave the market, while also ensuring that its branch network has a sustainable future in the community."