DUBLIN (AFP) - Ireland's biggest bank, Allied Irish Bank, has paid back millions of euros to customers who were levied with incorrect foreign exchange charges, chairman Dermot Gleeson said.
"To date, we have identified about 1.1 million transactions eligible for refunds, and about 173,000 accounts, so repayment is a large and costly project," he told a parliamentary committee.
"We've repaid about 12.7 million euros of 26.1 million euros, which arose over an eight-year period. About a third of the repayments are under 10 euros; two thirds are under 20 euros, 96 percent are under 250 euros," he said.
The bank has been under investigation by banking watchdogs since the incorrect charges were revealed.
The charges involved were not "over-charging", Gleeson claimed before the Oireachtas (parliament) Committee on Finance and the Public Service. They were charges had not been notified to the banking regulator.
He said the rates charged were the same rates as everyone else charged, "lower in some cases, and it is likely that if we had simply notified these rates to the regulator, they would have been approved."
Gleeson said AIB "failed to operate the statutory system of invigilation in the way in which it was intended, and thereby failed in our obligations to the regulator. We failed to comply with the law and that is a serious matter.
"AIB is sorry for the serious lapse in our responsibilities towards our regulator in the matter of FX (foreign exchange) charges," he said.
A leading lawyer and former attorney general, Gleeson said the bank's investigations did not uncover a culture of overcharging.
"What it did find was a degree of error in the dependability with which we delivered a small number of products to our customers which is not acceptable."
He said AIB's failure to notify the correct charges became known within the bank in September 2002 and its failure to resolve the issue then is a matter of "serious concern".
Gleeson outlined a series of system changes to ensure the situation did not arise again and said AIB had "had its soul more thoroughly searched than most other banks."