ANZ has agreed to a record $240 million fine sought by Australia’s financial services watchdog over years of “unconscionable conduct”.

ASIC and ANZ will ask the federal court to impose the penalties in relation to four separate proceedings.

These include acting “unconscionably” in dealing with the Australian government while managing a $14 billion bond deal, and incorrectly reporting its bond trading data to the government by overstating the volumes by tens of billions of dollars over almost two years.

ASIC also accused ANZ of failing to respond to hundreds of customer hardship notices, in some cases for more than two years, and of failing to have proper hardship processes in place.

ANZ is also accused of making “false and misleading” statements about its savings interest rates, and failing to pay the promised rate to tens of thousands of customers.

The fourth proceeding involves allegedly failing to refund fees charged to thousands of dead customers, and not responding to loved ones trying to deal with deceased estates within the required time frame.

“Time and time again ANZ betrayed the trust of Australians,” ASIC chair Joe Longo said.

“The total penalties across these matters are the largest announced by ASIC against one entity and reflect the seriousness and number of breaches of law, the vulnerable position that ANZ put its customers in and the repeated failures to rectify crucial issues.”

He said ANZ had shown an “unacceptable” disregard for the trust of customers and the government.

“In the bond trading case, ANZ was in a trusted position and its conduct had the potential to reduce the amount of funding available to the government. This funding is used to support critical services including Australia’s health and education systems, affecting all Australians,” Longo said.

“When public funds are put at risk, every Australian pays the price.”

The court will determine whether the proposed penalties for each matter are appropriate.

ANZ will implement a program to address the allegations by ASIC, as well as a $150 million “root cause remediation program” to identify the weaknesses across the company that led to the errors.

“While we have worked hard to get regulatory certainty on these matters, the reality is we made mistakes that have had a significant impact on customers,” ANZ chair Paul O’Sullivan said.

“On behalf of ANZ, I apologise and assure our customers we have taken the necessary action, including holding relevant executives accountable.”

ANZ said it had not been accused of market manipulation in relation to the government bonds.