The managing director of AIB, Mr Donal Forde, yesterday issued a resounding mea culpa as he apologised for overcharging foreign exchange customers but attributed it to an honest administrative mistake.

He described as "wrong and unfair" any suggestion that the bank sought to cover up the overcharging - put at a total of €14 million - and only went public because the story emerged in news reports earlier this week.

But he admitted only becoming aware of the problem on Tuesday, although it had been known about "at departmental level" since 2002.

The bank had already set up an internal investigation, would open up to a full examination by the Irish Financial Services Regulatory Authority (IFSRA), and expected to be subject to an independent review as well, Mr Forde said.

Nor would the bank profit from the overcharging, which dated back to 1995, he added.

AIB would endeavour to repay customers or, if that was not possible, would come to an agreement with IFSRA on how to disburse the outstanding funds.

Mr Forde, who was in London for an investors' seminar, told The Irish Times he expected to meet with IFSRA on Monday to discuss details of the overcharging, which he put down to "human error".

The bank issued a public apology on Thursday for overcharging on a certain category of foreign exchange transactions over the past eight years.

The bank levied a 1 per cent charge on non-cash foreign exchange transactions of more than £500 (€700), rather than the 0.5 per cent for which it had received approval from the Office of the Director of Consumer Affairs. The transaction charge was cut in April to the approved level.

Mr Forde said: "I am offering the figure of €14 million with a high level of confidence but subject to confirmation and that will no doubt be subject to independent verification."

He added that he would seek to reassure investors not only of the scale of the mischarging, but "that this is a mistake, that there's nothing more sinister".

"Clearly somebody just put the wrong rate on the submission. I can't imagine that there's any more to it than that," he said

While explaining that the unidentified department had incorrectly informed the IFSRA of the levy charged, Mr Forde said the error was compounded by a lack of understanding by bank staff of the seriousness of giving the regulators incorrect information.

He said that, in 2002, the department in question had examined the inconsistency between the rate advised to the IFSRA and the rate programmed into the bank's computers.

"There was some analysis of that, at department level, and wrongly the conclusion was reached that the advice was simply an administrative error," Mr Forde said. "The critical issue here is that it wasn't understood or appreciated that the advice was the basis of approval, essentially, from the regulators."

The department, which he refused to identify, did not inform senior management of the problem, he said.

The issue was re-examined in late March during a price review.

"This time it was seen in more serious terms and it was recognised at departmental level that AIB could have a case to answer," Mr Forde said.

He said the price was adjusted to the approved 0.5 percent and the department "began preparing a file for submission to senior management and to the regulator".

"It is evident that that file was in preparation when this news broke," he said.

Investors attending yesterday's seminar at London's Great Eastern Hotel had not raised the issue, Mr Forde said.