AIB has paid €3.7 million to some 6,855 business customers who were overcharged as a result of an error in relation to their overdrafts.

The average refund was €543, including compensatory interest. It is understood the error was discovered by by AIB and notified to the Central Bank.

“Following a recent review by AIB of its overdraft product, it was highlighted that a number of issues may have resulted in an unintended error in the amount of surcharge interest and/or fees being charged to the accounts,” the bank said. “The bank is making refund payments relating to . . . impacted customer accounts in relation to this matter.”

It is understood the payments began to be made to customer accounts last month.

“AIB sincerely apologises for this error and any inconvenience caused as a result and the appropriate changes to procedures have been implemented,” the bank said.

The bank was not able to clarify last night which years the embarrassing error covers.

Further action

It is not clear if the Central Bank plans to take any further action against AIB, which is 99.8 per cent owned by the State.

The overcharging comes just weeks after Permanent TSB, another State-controlled bank, announced the details of a redress scheme for customers who were not offered a tracker mortgage when their fixed interest periods ended from 2006 onwards.