Banking giant ANZ will pay $13 million in compensation to 200,000 customers after failing to pay them enough interest on their savings accounts.

The corporate regulator says ANZ failed to accurately apply bonus interest to its Progress Saver Accounts for several years.

ANZ reported the mistake to the Australian Securities & Investments Commission after a customer complained.

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“ANZ is contacting and providing refunds to affected past and present PSA holders, a process that should be completed by the end of this week,” ASIC said in a statement on Thursday.

ANZ reported a record $7.2 billion profit for the 2014-15 financial year, despite noting the “contrained environment” it was working in – particularly a slowing housing market, and new capital constraints and lending ‘speed limits’ imposed by the Australian Prudential Regulatory Authority.

Outgoing CEO Mike Smith came under fire in October for increasing home loan rates by 18 basis points, along with other major banks who raised by between 15 and 20 basis points.

He defended the move to reporters, saying: “Despite last week’s round of interest rates rises, ANZ still has the lowest standard variable rate of all the majors.”