Customers who purchased travellers' cheques valued at more than €600 from AIB in the period between the end of August 1995 and the 25th of April this year were overcharged by 1.5 per cent, the bank admitted yesterday.

In an advertisement in the Sunday newspapers, the bank set out a detailed list of the foreign exchange transactions which were subject to overcharging, promising to refund customers with interest for the mistake by the end of August.

The ad makes clear that the bank did not simply overcharge by 0.5 per cent across the board but the level of overpayment by customers on some transactions was far higher. Among the transactions affected was the issue of travellers' cheques in all currencies, including former euro-zone currencies before the fixing of euro-zone exchange rates at the end of 1998.

Instead of being charged the 0.5 per cent for which the bank had regulatory approval, customers were charged more than 2 per cent on these transactions, well ahead of the average 0.5 per cent overcharging admitted to by the bank two weeks ago.

Other transactions affected by the overcharging included the issue of sterling drafts, sterling standing orders and sterling credit transfers for amounts between €600 and €3,000. The overcharging on such transactions amounted to 0.45 per cent.

Customers purchasing foreign drafts and euro zone currency drafts for amounts ranging from €600 to €13,000 were also overcharged by 0.45 per cent.

The bank also set out a list of international payments by customers where the level of overcharge was 0.16 per cent.

It has also emerged that the AIB official who has gone on paid leave from the bank while an investigation into the overcharging is continuing is the head of the strategic development unit, Mr Seamus Sheerin. A bank spokeswoman refused to comment on the matter.

According to yesterday's advertisements, the earliest date on which the overcharging occurred was August 31st, 1995, and it continued on some transactions until April 25th this year.

AIB said yesterday that it was currently developing automated systems to help it refund those who were overcharged. It is hoping to identify the majority of transactions and agree the refund amounts by the end of August.

By Friday, the bank and the Irish Financial Services Regulatory Authority (IFSRA), which began the investigation into the overcharging, had received almost 2,500 telephone calls on their customer helplines from people who believe they may be owed money by the bank.

However, many of those who bought travellers' cheques may never be identified because the purchases were over-the-counter cash transactions.

AIB has lodged €25 million at the Central Bank to cover the payments to customers - €20 million to cover the amount initial estimates suggest is owed to customers and €5 million for the interest on this.

The bank has admitted to overcharging customers on non-cash foreign exchange transactions despite the fact that it had regulatory approval for a charge of just 0.5 per cent. It has also emerged that the bank failed to tell the State's consumer watchdog in 1998 that it had been overcharging customers, despite the fact that the regulator specifically asked if it was applying the correct fees to all transactions.

Former comptroller and auditor general Mr Laurie McDonnell has been appointed to lead AIB's internal investigation and is due to report in mid-June.