Big banks told to stand and deliver

BANK bosses will be accused of being anti-competitive and shafting customers during a grilling Liberal Party backbenchers will use to demand new competition laws.

The bosses of the Big Four, ordered to appear before a Parliamentary hearing this week, will be told their reasons for not fully passing on interest rates — costing homeowners and businesses tens of millions of dollars a year — no longer stacked up.

The inquiry, set up by Prime Minister Malcolm Turnbull to try to silence Labor’s call for a Royal Commission into banks, will run over three days for about 12 hours.

Queensland Federal Labor MP Shane Neumann said the hearings were not good enough.

“How long are we going to have rip-off after rip-off, scandal after scandal, before the federal government takes seriously the public’s concerns about what happens in the financial services sector,” Mr Neumann said yesterday.

It is understood some of the House of Representatives Economic Committee members — on all sides of politics — will not hold back in their questioning.

New Reserve Bank Governor Philip Lowe implied last month customers were getting a raw deal because lenders were putting shareholders first.

Commonwealth Bank chief executive officer Ian Narev, who earns a whopping $12 million, will be the first to give evidence tomorrow, and will be heavily questioned as to why — as the nation’s biggest home loan lender — he has repeatedly failed to pass on the Central Bank’s interest rate cuts.

Robust questioning will also focus on excessive credit card interest, unfair insurance policies and why banks still make it too hard to switch to other lenders.

The official cash rate is 1.5 per cent but the average credit card interest rate is 17 per cent.

Credit card debt is about $50 billion — about 3 per cent of household debt — but $32 billion attracts interest.

Households would have more than $1 billion in their pockets if that interest rate dropped by 5 points to 12 per cent.

The House of Representatives Economic Committee chairman Liberal MP David Coleman will direct the hearing but nine other MPs will fire questions off to bank CEOs.