(MENAFN- AFP) Australia's largest banks will have to face a parliamentary committee for an annual grilling to "drive cultural change", Prime Minister Malcolm Turnbull said Thursday as he addressed public disquiet about their behaviour.
The country's "big four" lenders -- among the developed world's most profitable -- have been under scrutiny in recent years amid allegations of dodgy financial advice, life insurance and mortgage fraud.
Former investment banker Turnbull has resisted opposition Labor party calls for an independent inquiry into banking misconduct, but he has taken a more strident tone against them over the past few months and said Thursday they needed to be "open and accountable".
"Our big four systemically important banks operate under a social licence from the Australian people. They are built on a foundation of trust," Turnbull told reporters in Sydney.
"What we're setting in place here is ongoing, permanent cultural change and change that will make the banks ensure that they are accountable."
The banks -- ANZ, Commonwealth Bank, National Australia Bank and Westpac -- will have to face the Senate's economics committee, which previously hammered tech giants such as Google and Apple over corporate tax avoidance claims, at least once a year.
One key question they are expected to answer is why they do not pass on in full interest rate cuts by the Reserve Bank of Australia, a key tool wielded by the central bank to boost growth amid global economic turbulence and uneven domestic expansion.
The issue is particularly sensitive in Australia, where the big lenders hold the majority of housing loans and owning a home is viewed as a birthright.
Turnbull has been frustrated that the banks did not fully cut their home-loan rates when the RBA slashed interest rates to a new record-low of 1.5 percent on Tuesday.
NAB's chief executive Andrew Thorburn said he would attend the hearings to explain his bank's actions, while lobby group the Australian Bankers' Association (ABA) defended lenders' decisions.
"The federal government is entitled to call the banks before a parliamentary committee, however no other businesses are required to justify their commercial pricing decisions in this way," ABA chief executive Steven Munchenberg said in a statement.
Turnbull's announcement came amid a probe into benchmark interest rate-rigging by Australia's corporate regulator ASIC, reflecting similar moves by its counterparts in the US and Britain.
The last major inquiry in the sector was completed in 2014 and called on domestic banks to hold more capital to address weaknesses that emerged during the 2007-2008 financial crisis.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.