The Central Bank said it has "reasonable grounds" to suspect that a person who was formerly part of the management of Permanent TSB participated in a suspected contravention of the Consumer Protection Code.
In a statement, the Central Bank said it will set up an inquiry to see whether the person did actually breach the code, which is aimed at protecting bank customers.
The Central Bank did not name the individual, nor would Permanent TSB comment on their identity.
The Central Bank indicated it would not name the person at this stage as it would be up to the inquiry to decide whether its proceedings would be carried out in private or in public.
In 2019, Permanent TSB was fined €21m by the Central Bank in respect of "serious failings" around 2,007 of its tracker mortgage customer accounts.
The Central Bank said the lender's failure to put its customers first resulted in "distressing and in some instances devastating consequences" for some of its tracker mortgage customers.
Permanent TSB had admitted to 42 separate regulatory breaches of the Code of Practice for Credit Institutions and the Consumer Projection codes.
Following such an investigation, the Central Bank then has the power under the Administrative Sanctions Procedure to probe the role played by individuals.
It can decide to issue a supervisory warning, resolve the matter by taking supervisory action, agree a settlement imposing sanctions or refer the case to inquiry for determination and - where relevant - sanction.
It may also decide to take no further action.
Today the regulator said barrister Peter Hinchliffe has been appointed to conduct an inquiry in this case.
It said that Peter Hinchliffe has significant experience of making independent decisions in a legal or regulatory environment and he sits as a tribunal judge in the General Regulatory Chamber and in other jurisdictions in England and in Northern Ireland.
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Mr Hinchliffe is a member of the Enforcement Decisions Panel of the Office of Gas and Electricity Markets (OFGEM) and a Panel Chair for the Access Disputes Committee.
He also has held independent decision-making roles in the UK financial services sector as Deputy Chair of the Regulatory Decisions Committee of the Financial Conduct Authority and in similar roles with the Pensions Regulator and the UK Treasury and as Lead Ombudsman for insurance at the Financial Ombudsman Service.
In accordance with the bank's inquiry guidelines, Mr Hinchliffe will determine how the inquiry will proceed and the procedures that are to be followed.
Donohoe accused of not prioritising legislation to hold bosses to account
Sinn Féin's spokesman for Finance, Pearse Doherty, has accused the Minister for Finance Paschal Donohoe of not prioritising legislation to hold senior executives to account for the conduct of their firms.
In a heated exchange at an appearance before the Oireachtas Committee on Finance, Public Expenditure and Reform and Taoiseach, the Minister for Finance responded that Deputy Doherty was "busy making social media content for troll farms in Macedonia or wherever".
Paschal Donohoe was appearing before the Committee as part of the pre-legislative scrutiny of the Central Bank Individual Accountability Framework Bill 2021.
Pearse Doherty said the Central Bank had publicly requested the powers contained in the Bill four and a half years ago and that if it had been a priority for the Minister, it would not have taken four and a half years to introduce the legislation.
The Minister for Finance replied that Deputy Doherty "was looking to create an inference" and that he knew that was wrong and that action had been taken over the tracker issue.
He added that the Central Bank had taken action today.
Mr Donohoe said the legislation had taken time and there had been extensive consultation with both the Attorney General and the Central Bank on it.