Some ANZ customers had been paying too much interest on their home loans for a decade before the bank refunded $69 million to hundreds of thousands of people, a royal commission heard.
Senior ANZ executive Sarah Stubbings admits the bank took too long to realise the extent of problems affecting about 400,000 'Breakfree' home loan customer accounts.
Most customers only learned about the processing errors dating from 2003 when the bank contacted them about its remediation program in early 2014, the financial services royal commission heard.
Counsel assisting the commission Albert Dinelli said some customers had to wait 10 years for a refund of an amount they should never have paid.
"That's not good enough is it, to have an issue that's only resolved after that period of time for customers?" Mr Dinelli asked Ms Stubbings on Tuesday.
ANZ's head of home loan products said the remediation process did take too long.
"We had not done anything like that of that nature before," she said.
"And it took us longer because we were learning and we didn't have things in place like remediation frameworks or remediation principles."
Some Breakfree home loan package customers were charged an interest rate higher than they should have been and some offset accounts were also not properly linked to mortgages, resulting in people being charged excess interest.
Ms Stubbings said ANZ should have realised there was a systemic issue earlier than it did in 2010.
The commission heard there were complaints from customers that resulted in $5-6 million in "ad hoc" refunds between 2003 and 2013, before the major $69.3 million remediation program in 2014.
The bank put in place processes and controls to prevent a recurrence of the issues in 2012 and 2013.
But a number of similar issues still occurred, with the royal commission to examine four other processing errors with ANZ's home loans.
The inquiry also heard the Commonwealth Bank took four years to discover a programming error that began when it introduced an automated system for assessing personal overdraft applications in July 2011.
Senior CBA executive Clive van Horen said the bank had a number of controls in place that it would normally expect to identify errors.
"So yes, a number of controls in place that didn't detect it in this case until 2015," CBA's executive general manager of retail products said.
Once the problem was detected, it was fixed in 17 days.
Mr van Horen said 9400 customers were approved for personal overdrafts that should have been declined while 1100 received a higher overdraft limit than they should have had.
The error in the automated serviceability calculator meant Australia's biggest bank failed to take into consideration some consumers' declared expenses, instead substituting zero housing expenses and living expenses based on a benchmark.
CBA paid $180,000 in fines for breaching responsible lending laws and wrote off $2.5 million in personal overdraft balances in 2016.
