The trusts administered by AIB and which were charged fees in excess of those which had been agreed were onshore or domestic trusts administered by AIB Executor and Trustee Services.

The overcharging is particularly embarrassing for the bank given the role a bank plays in the administration of a trust - a role defined by the name these financial structures are given: trust.

A person who wishes to establish a trust hands over money or other assets to the administrators of the trust, who then become the legal owners or guardians of the assets.

The administrators look after the assets guided by certain agreed rules.

When the trust comes to the end of its assigned life period, its assets are distributed to the benefactors, which are stipulated at the time the trust is established.

Because of the legal role played by the administrators of a trust, the person or persons establishing the trust have to feel very confident that they and the benefactors of the trust will be treated fairly.

In the case of the trusts administered by AIB, it seems that 43 of them, which were established before 1971 and were still active in January 2002, were found to have been overcharged.

The amount involved was €1.7 million - or an average of €39,534 per trust.

It was agreed at the time of the formal integration of its three constituent banks into AIB in 1971 that new fees then established would not apply to these trusts. Instead they would continue being charged the rates set by the relevant constituent bank - The Royal, Provincial or Munster and Leinster.

However, at a later date when an increase in administration fees was decided on by the bank, this was applied to both the post-1971 and pre-1971 trusts.

When the overcharging was discovered, the Central Bank was notified. It insisted that the bank appoint independent legal and taxation experts to ensure the trusts and their benefactors were given their due repayments. Compensation equal to the repayments was also issued.

The position of trusts that had come to the end of their term and had had their assets dispersed to their benefactors prior to January 2002, but which had also been subjected to overcharging, is still being examined.

AIB did not say yesterday how many trusts were involved in this category.

The bank said it was likely that the refunds and compensation would come to a total of €2 million.

The Central Bank was aware of these cases prior to yesterday's disclosure.

Trusts are used for a variety of legitimate reasons. However, they have received very bad press in recent years, mostly because of the Ansbacher scandal, which involved trusts located in the Cayman Islands that were being used for tax evasion purposes.

More recently, the Revenue Commissioners received some €105 million from more than 250 customers who had trusts with the Bank Of Ireland Trust Company in Jersey.