National Irish Bank (NIB) is to refund 47,000 customers an average of €59 in the first part of a €10.6 million programme to reimburse unauthorised fees and interest charges. It follows the publication in July of the seven-year investigation of the bank by High Court-appointed inspectors.

The inspectors concluded that there were significant deficiencies in the bank's procedures and controls for the manual amendment of account fees and charges between 1988 and 1998 leading to the overcharging of customers. It was one of a number of issues investigated by the inspectors including the operation of bogus non-resident accounts and the sale of offshore investment products to facilitate tax evasion.

NIB said yesterday that it would refund all manual amendments of less than €13 made during the period, regardless of whether there is documentation to validate them. The refunds will include the initial amendment and interest. The cost of this initiative is €2.8 million and the average payout will be around €59, according to the bank. The bank said it was taking this approach to speed up the process.

NIB has set aside another €7.8 million to cover the cost of refunding unauthorised amendments of more than €13. These are being investigated case by case and will be refunded "where ever documents are not available to explain these charges", the bank said yesterday. This process will take up to 12 months to complete.

Any surplus funds left after the reimbursement process is complete will be given to charity.

The bank said yesterday: "While manual amendments to the computer-calculated fees and interest were a legitimate part of its system and process, the bank's controls on how such charges were applied were not considered by the inspectors to be adequate."

NIB has hired international consultants Lexecon to help devise the reimbursement scheme. The bank said it had records of "most" of the fee amendments but there were gaps in its records - which go back 16 years - that will make it impossible to establish if some amendments were valid. The bank believes it will be able to validate 80 per cent of the amendments.

Mr John Trethowan, NIB chief operating officer, said: "We apologise to everyone who has been affected. This is a comprehensive scheme that gives our customers the benefit of the doubt in every case. We have also instigated a comprehensive change programme and introduced new systems and controls, transforming how we operate as a business."

The bank has set up a contact number, 1850 946 865, for customers.