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The Australian government has promised a "significant" cultural change in the way Australia's big banks treat their customers. ahead this week's three-day Parliamentary inquiry into the banking sector set to get underway in Canberra on Tuesday.
In August, the government announced it would grill the heads of the four major banks, the Commonwealth Bank, ANZ, Westpac and NAB, following their controversial decision not to pass on the Reserve Bank of Australia's (RBA) interest rate cut to customers.
The government has said it would be exploring ways to make the banking sector more accountable through driving competition within the industry, with Commonwealth Bank boss Ian Narev to be the first CEO to face the House of Representatives Economics Committee on Tuesday.
The committee's chair, Liberal MP David Coleman, said the inquiry would help restore consumer confidence in the big banks, which have been revealed to be the most profitable in the OECD.
"This public forum of 12 hours of hearings this week is a very substantial and significant development and I think it will lead to significant cultural change in the industry," he told the Australian Broadcasting Corporation (ABC) on Tuesday.
Despite the government inquiry, the federal opposition has maintained its pressure on the government to call a royal commission into banking; MP Matt Thistlethwaite told the Australian Broadcasting Corporation (ABC) on Tuesday that the "unethical behavior" had been exposed but a three-day questioning would not result in any meaningful change.
"Many of the scandals in the banking industry are continuing, the unethical behavior continues," Thistlethwaite said.
"Whistleblowers have told us that what's been exposed to date is the tip of the iceberg."
Labor's Shadow Minister for Financial Services, Katy Gallagher said the inquiry was a weak response from the government and was just a way for Prime Minister Malcolm Turnbull to protect the banks from having to face an independent royal commission.
"The bank CEOs will walk away at the end of their three-hour chat, safe in the knowledge that they won't be questioned again," she told Fairfax Media.
"Meanwhile those who've lost their savings, their homes or their businesses and who remain in debt to the banks will be stuck living with the consequences every day."
While the government has maintained its position that the three-day inquiry will uncover the root of the issue, research undertaken by the Australia Institute found that two-thirds of Aussie voters still want a royal commission.
The survey of more than 1400 voters, published in Fairfax Media publications on Tuesday, found that 77 percent of Australians believe the banks should be forced to pass on the interest rate cuts set by the RBA, while 75 percent believe banks should put customers ahead of shareholders.
Half of all voters think the government's inquiry is simply a way for Turnbull to protect the banks from facing a royal commission.
Meanwhile ahead of the inquiry, the Turnbull government announced it would be introducing new measures which will make it a criminal offence for banks, bankers and investors to manipulate financial benchmark such as the local stock market or the RBA's interest rate.
Treasurer Scott Morrison said the measures would "better protect Australians from the possible abuse and manipulation of financial benchmarks by banks" and "ensure that past egregious conduct by the banks in manipulating benchmarks is prevented in future".
The inquiry into banking begins in Canberra on Tuesday, with the head of each of the four banks to face three hours of questioning over the next three days. The committee will be chaired by Coleman and feature six Liberal MPs, three Labor MPs and one representative from the Greens.
(APD)
