Ulster Bank is to refund 25,000 customers it wrongly charged on personal loans.
The refunds relate to payment protection policies the bank offered to people when taking out the loan and will total around €4.2m.
A spokesperson for the bank said the error was discovered as part of an ongoing review process and applied to personal loans that were repaid early.
He said that compound interest would be applied to the amounts in question.
Under the policies the bank repays customers' loans if they cannot meet repayments due to permanent disability, redundancy or death.
The bank is understood to be in the process of contacting customers to inform them of the mistake.
Just over two years ago, Bank of Ireland admitted to having overcharged 65,000 customers to the tune of €15m on payment protection policies.
