Reserve Bank Governor Philip Lowe and Federal Treasurer John Frydenberg say there’s no excuse for banks failing to pass on the RBA rate reduction to customers in full.
But reports suggest the Big Four banks are reaping an extra $14 billion a year in interest repayments after withholding a quarter of all Reserve Bank rate cuts since 2011 while at the same time reducing term deposit interest rates by more than the official cash rate reductions.
An analysis by comparison website RateCity shows standard variable rates have fallen only 2.99% since October 2011, despite the RBA reducing the cash rate 4%.
The RateCity analysis found three-year term deposit rates had been slashed 4.3%, compared with the 4% reduction in the cash rate. Interest paid on everyday access accounts was sliced by 4.5% over the same period.
PM Scott Morrison has rebuked the banks over their failure to pass on in full the RBA’s October rate cut of 0.25 to a record-low 0.75%. The CBA cut its owner-occupied rate by 0.13, ANZ 0.14, and NAB and Westpac 0.15. Bank of Queensland managed only 0.10.