National Australia Bank , the country's top lender, has returned about A$3.5 million ($3.10 million) to 16,000 customers for overcharging them, due to a system error, and interest compensation.

NAB's refund comes as 12 lenders in the country including NAB face a potential class action suit over allegations they overcharged customers about A$5 billion in penalty and late fees in the past six years.

A NAB spokeswoman said the refund had nothing to do with the potential class action suit and it maintained the suit has no basis for claim.

The system error, which relates to classification of a customers profile as business or personal client, happened between 2002 and 2009 and NAB notified the regulator in 2008, the spokeswoman said.

The refund was carried out in April, she said.

(Reporting by Narayanan Somasundaram; Editing by Ed Davies)

Australia