AIB has admitted up to 40,000 of its customers may have been charged incorrectly over a number of years.

In a statement issued, the bank says the problem arose when some personal accounts were classed as business and vice versa.

It says it informed the Financial Regulator when the issue was identified in November 2008 and that a process is now underway to identify those who have been affected and to ensure they are fully reimbursed.

AIB says the average refund is expected to be around €100 per customer, meaning the estimated cost of the error to the bank will be around €4 million.