AIB has become the third Irish bank to reduce commissions on euro-zone currencies in order to fend off investigation by the European Commission. Six Irish banks have come under the investigation.

Institutions including National Irish Bank and Irish Permanent are expected to make similar announcements in the coming weeks.

Bank of Ireland and Ulster Bank have already moved to avoid prosecution for alleged price-fixing by the European Commission by adjusting their exchange-rate charges for dealings in euro-zone currencies.

National Irish Bank, ACC and the now merged Irish Permanent and TSB banks are currently in discussions with the Commission on their charging structures. If their proposals meet with its approval, the Commission is likely to drop its investigation. ACC has now largely moved out of foreign exchange transactions.

The European Commission has been investigating 100 European banks for alleged price-fixing. If the allegations were proven, the banks would have faced hefty legal costs and fines.

The voluntary restructuring of charges by the Irish banks is a significant victory for the Commission and will greatly benefit consumers.

A spokesman for European Commission Competition Commissioner, Mr Mario Monti, confirmed it had ended its investigation into AIB, Bank of Ireland and Ulster Bank. A number of banks in Belgium, Germany and the Netherlands have also voluntarily presented revised charging structures to the Commission to end the investigation.

AIB said yesterday that, from June 18th, it will purchase eurozone currencies free of commission charges from its customers, up to an equivalent of £1,000 (#1,270) per day. This will be expanded to include sales of these currencies from October 1st next.

In a statement, AIB said its commission charge for the purchase and sale of euro-zone currency notes would also be reduced from 3.5 per cent to 1.5 per cent from June 18th.

European Commission inspectors raided European banks last year to investigate allegations that banks were colluding to fix charges relating to euro transactions.

The Commission was worried that by maintaining high charges for exchanging euro currencies, the banks would remove the new currency's main selling point - the reduction of costs for travellers and cross-border businesses.