Financial regulator IFSRA has found that some AIB staff and management were aware that the bank was overcharging thousands of foreign exchange customers.
In a report on the affair published today, IFSRA said there were at least seven opportunities for staff and management to inform the relevant regulators between 1998 and 2004. 'This was not done,' it said.
The report also found that AIB reduced the foreign exchange charge in April without telling the regulator.
It found 'inadequate documentary evidence' of decisions made on charges, and that procedures to raise matters higher up the management chain were also inadequate.
Chief executive Liam O'Reilly described the failures uncovered by the investigation as 'completely unacceptable', adding that such practices would not be tolerated.
But he said it was not possible for the watchdog to impose any sanctions, though new legislation would allow this to happen in any future cases.
The report did not name the senior bank officials who may face disciplinary action over the handling of the affair, because due process is still underway. But it has ordered AIB to apply disciplinary sanctions against individuals found responsible. It has also called for a full review of AIB's pricing policy and a centralised register of all charges levied on products
The report found that the total amount of overcharging by AIB, including interest, came to €34.2m. €25.6m of this related to the foreign exchange issue, and half of this has been repaid.
After a series of questions earlier this year to AIB from RTE News, the bank confirmed that it had been overcharging thousands of its foreign exchange customers and that the practice had been going on for years.
In conjunction with the financial regulator IFSRA, the bank agreed to set up an independent inquiry into the affair and also agreed to pay back its customers.
Today's report also covered the Faldor affair, which involved a breach in tax law by five former AIB executives.
Between 1989 and 1986, funds of then senior executives of AIB were managed through a British Virgin Islands investment company, Faldor, which was managed by AIB Investment Managers.
The report found that Faldor benefited from 'inappropriate deal allocations' through artificial deals amounting to €48,000. This money came out of AIBIM's own funds.
IFSRA said it had no evidence to indicate that the beneficiaries of Faldor influenced or were aware of these deals. AIBIM also used artificial deals to boost the performance of certain other clients' portfolios. The report found that two specialised unit trusts were hit to the tune of €174,000 by other inappropriate deals between 1991 and 1993.
* AIB shares closed 27 cent lower at €14.67 in Dublin this evening after the publication of the IFSRA report.
