National Irish Bank spent £5.75 million (#7.3 million) last year on the various inquiries underway into the bank, and expects to spend a similar amount again this year.

The bank is also likely to be asked to pay the costs of the inquiry being carried out by two High Court inspectors into allegations of interest and fee loading by the bank, and the sale of unauthorised offshore bonds.

The inspectors are using personnel from PricewaterhouseCoopers to assist in their inquiry and are paying over £1,000 a day to some of the persons involved. The inspectors are the retired Supreme Court judge, Mr John Blayney SC, and Mr Tom Grace, a partner with PricewaterhouseCoopers.

The bank has identified about 100 offshore bond accounts containing approximately £14 million, about which it feels questions need to be answered. Approximately £50 million was invested in Isle of Man and Guernsey bonds sold through the bank. The internal inquiry into the matter is ongoing.

A copy of a report from an authorised officer, Mr Martin Cosgrove, who investigated the sale of the bonds by the bank, has been given to the Garda Fraud Bureau and it is now conducting its own inquiries into the affair.

It is understood the report names the approximately 280 customers who bought the offshore bonds through the bank.

The bonds were sold by a NIB subsidiary, NIB Financial Services Ltd, and a small number of employees of the company visited customers and encouraged them to place investments in the bonds. The Fianna Fail TD, Ms Beverley Cooper-Flynn, was a former employee of the subsidiary. The High Court inspectors are investigating whether the sale of the bonds facilitated tax evasion by NIB customers.

The bank's internal inquiries have led to the refunding of about £140,000 to customers who may have been subjected to excessive interest charges on their current accounts. An examination of fee charges imposed by the bank is ongoing, and it is thought likely some customers will eventually receive refunds.

A special centre in Camden Street, Dublin, was set up by the bank as a headquarters for its own inquiries into the allegations made against the bank, and to service the inquires by the High Court inspectors. Personnel and other resources diverted to the Camden Street centre are extra to the £5.75 million in direct costs incurred last year.

The bank is also being investigated by the Comptroller and Auditor General, Mr John Purcell, who is preparing a report for the Dail Committee of Public Accounts on DIRT payments and bogus non-resident accounts.

The bank is understood to be satisfied with the DIRT inquiry by Mr Purcell as it involves over 35 financial institutions. The bank has said it feels it is being unfairly targeted through the appointment of the High Court inspectors and that problems which it might have also exist in other and larger financial institutions.

The Central Bank is maintaining a watching brief on the inquiries underway into NIB, and is being supplied with regular updates on developments by the bank.

The bank is meeting legal costs incurred by its staff in relation to the various inquiries. This has cost it £100,000 to date. Managers and other staff who meet the inspectors are usually accompanied by legal advisers. In return for meeting the legal costs, the staff are providing the bank with transcripts of the interviews.

Last week the High Court rejected an argument from the bank that it should be supplied with transcripts of all interviews conducted by the inspectors. As well as interviewing managers, staff from the bank's financial services division, and directors and senior executives, the inspectors are also interviewing bank customers.

It is understood that a group of around 65 bank managers meets regularly to discuss developments in the bank. One of the central issues to be decided by the inspectors is whether any wrongdoing which may have occurred at branch level, was done with the knowledge or even encouragement of the bank's senior management.

The bank has repeatedly argued that there was no centrally organised or systemic overcharging of customers. It has also said that despite all the negative publicity to which it has been subjected, its business has not suffered and its customers have remained loyal.

The bank is having to deal with the disruption caused by the various inquiries, while at the same time implementing changes which form part of a worldwide initiative by its parent, National Australia Bank.