Several National Australia Bank staff accepted cash from "introducers" - such as a gym owner and tailor - and faked documents for loans that some customers could not afford, an inquiry has heard.
There were also cases of bankers accepting payment from customers for loan approvals, the financial services royal commission heard.
NAB expects to pay at least $9 million and up to $23 million in remediation to customers affected by the fraud and misconduct by 60 bankers, including branch managers.
Four people, including the gym owner and tailor, brought in $139 million in loans for NAB over four years under the bank's introducer program, which pays businesspeople outside the bank for successful lending referrals.
The four earned $630,000 in commissions, of which $488,000 went to one introducer, documents before the royal commission show.
Investigations sparked by whistleblower complaints in 2015 found suspected and isolated cases of cash payments and kickbacks between bankers and introducers, including someone who was not registered as an introducer.
Several bankers created false documents and accepted cash payments, a January 2016 NAB document said.
A KPMG investigation found some bankers were helping customers prepare false pay slips while some customers living in Australia claimed to be full-time employees in China.
By early 2016 NAB had identified six customers with $3.5 million of loans in arrears and 90 with $50 million in loans where there were concerns over their ability to service the debt.
Senior counsel assisting the commission Rowena Orr QC said that many customers ended up with loans they should not have had and were not able to afford.
Senior NAB executive Anthony Waldron said there were some obvious cases where that occurred.
The bank believes about 1360 customers may have been affected by the misconduct, not all of whom it has contacted yet.
Mr Waldron said the bank is still reviewing customer files and is about to begin its remediation program.
NAB's executive general manager of broker partnerships said initially 26 customers will receive offers, beginning over the next week or two.
The bank estimates it will pay between $9 million and $23 million in total.
"Our early indications are that it is more likely to be at the lower end of those numbers," Mr Waldron said.
The royal commission heard a July 2016 review uncovered other cases of fraud involving a significant number of bankers, outside of the greater western Sydney area where the misconduct was initially uncovered.
NAB said it has made extensive changes to its introducer program.
Australian Associated Press