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PM calls for regular banks inquiry

AAP logoAAP 4/08/2016

Prime Minister Malcolm Turnbull will ask parliament to require the major banks to face a committee inquiry at least once a year.

The decision to make the banks more accountable came after the big four banks failed to pass on the latest official interest rate cut in full.

"The banks should have passed on the full rate cut," Mr Turnbull told reporters in Sydney on Thursday.

Mr Turnbull said the banks will be required to face the parliament's economics committee to give a full account of the way in which they are managing their affairs, their dealings with customers and their interest rate policy.

"They will be regularly accountable to the Australian people through their parliament in exactly the same way as the Reserve Bank is and APRA is," he said.

Treasurer Scott Morrison said he had spoken to all the banks on the issue.

"They have agreed to participate in the process," he said.

Opposition Leader Bill Shorten has ramped up his demand for a royal commission into the banks.

But Mr Turnbull said apart from being hugely expensive, a royal commission might go for a year or several years and when it comes to an end it writes a report.

"What we're setting in place here is ongoing, permanent cultural change and change that will make the banks ensure that they are accountable," he said.

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