Permanent TSB is going to have to compensate almost 1,400 mortgage holders.
This news comes after customers suffered "serious failures" on their accounts.
The bank's mistake meant that customers suffered consequences such as over payments, arrears and legal proceedings.
In the most extreme cases, 22 mortgage holders ended up losing their homes.
Those who lost their homes will receive €50,000 in compensation. All other affected customers will receive €3,200 compensation.
Permanent TSB will begin contacting the affected customers, and expects to be fined up to five million euro by the Central Bank for these mistakes.
Chief Executive Jeremy Masding says there has been a failure at the bank:
"There are no two ways about this. This is a very serious issue. The key issue here is a failure at the bank. It's our failure and it's our responsibility to deal with it, and I hope that we can demonstrate this morning that we are doing that in a full and comprehensive manner."
