A programming error in the Commonwealth Bank's automated calculator for personal overdraft applications has forced the bank to pay $180,000 in infringement fines and write off $2.5 million in loan balances.

The Australian Securities and Investments Commission today said CBA had self-reported the unidentified programming error following an internal review prompted by ASIC surveillance.

The review found that the error in CBA's automated serviceabillity calculator meant the bank failed to account for the declared housing and living expenses of some consumers applying for personal overdrafts between July 2011 and September last year.

The calculator entered $0 in housing expenses and used a benchmark for living expenses, which in some cases was "substantially less" than the consumer's actual expenses.

"As a result, this led to an over-estimation of the consumer's capacity to service the overdraft facility," ASIC said.

The bank approved 9577 customers for personal overdrafts that should have been declined, and handed out 1152 higher overdraft limits than normal, as a result of the programming error.

"ASIC was concerned that this conduct breached responsible lending laws and that affected consumers would have been unable to comply, or could only comply with substantial hardship, with their obligation to repay their personal overdraft on demand," the corporate regulator said.

It levied four infringement notices totalling $180,000 on the bank last month for breaching responsible lending laws.

ASIC said CBA had advised it would also write off around $2.5 million in personal overdraft balances as a result of the programming error.

'Credit licensees should continuously monitor their internal processes to ensure compliance with the law.

"This is especially the case with automated decision-making systems where ongoing monitoring is needed to ensure that information is correctly inputted into systems," ASIC deputy chairman Peter Kell said in a statement.

CBA said the system issue affected less than two percent of its personal overdraft customers. It said it had nearly completed remediating the issue for affected customers, and that their credit ratings would not be impacted.

“We sincerely apologise to our customers and we regret that this error occurred,” CBA head of retail products and strategy Clive van Horen said in a statement.