The Irish financial regulator today said it had achieved its first objective of securing refunds for overcharged AIB customers.
Speaking after the publication of an interim Irish Financial Services Regulatory Authority (IFSRA) report into charging issues at AIB, chief executive of the watchdog Mr Liam O'Reilly said the way to rebuild confidence in AIB and the Irish banking sector was to complete the investigation.
He said the possibility that someone within the bank may have deliberately failed to inform IFSRA as to the bank's correct foreign exchange rates was being investigated.
"We wouldn't be conducting this investigation unless we had grounds to believe there was some kind of cover-up," he said.
The key issue for the regulator was that AIB is "required under the consumer credit act to report rates to the regulator. They didn't notify the regulator with rates and as a result they were charging customers rates that were above those approved and notified to the regulator."
This is said was "overcharging from the point of the law. It is certainly not overcharging from the point of the customers aspect of things."
He said while AIB was not obliged under current legislation to repay the money, it was doing so because the bank felt that the bond of trust with the customers had been broken.
However, he cautioned against being overly critical of the bank and pointed to major initiatives taken by AIB to ensure compliance and making sure whistle blowers feel free to speak
Mr O'Reilly also rejected the suggestion that the response from IFSRA when it was contacted by the whistle-blower on April 20th this year was slow. IFSRA met AIB officials at a scheduled meeting on April 30th and the issue was first raised there. The whistle-blower subsequently decided the response was too slow and contacted the media.
Mr O'Reilly said the regulator gets plenty calls which have to be followed up very carefully.