The major bank was found to have failed to stop charging or refund fees charged to deceased estates after customers' deaths.
It also failed to respond to requests for information from the dead clients' representatives, which it is required to do in under 14 days.
The bank has acknowledged it didn't always meet the expectations of its customers. (Esther Linder/AAP PHOTOS)
ANZ identified the issue in 2022 but took over a year to start implementing solutions and another year before it started its ongoing customer remediation program.
The Banking Code Compliance Committee, an independent body that monitors banks' compliance with the Banking Code of Practice, began investigating the issue of deceased-estate compliance in 2023.
Committee chair Ian Govey said publicly naming the bank for its failures was the most serious sanction the industry overseer could levy.
"The significance of the deficiencies in ANZ's compliance frameworks was deeply concerning," he said.
"Its non-compliance warranted such a sanction."
While the bank had since reimbursed many of the estates, the committee said it did not act quickly enough.
ANZ service operations manager Dan O'Neil said customers should "rightly" expect compassionate and timely support from their bank.
"We know we have not always met the expectations of our customers and their families at a difficult time in their lives," he said in a statement on Tuesday.
"For this we are sorry and we are committed to continuing to make changes to better support our customers."
The Banking Code Compliance Committee found another bank had charged fees to deceased estates but chose not to publicly name the financial firm as it resolved the issue within a reasonable timeframe.
It is investigating a third bank.
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