The Australian sharemarket enjoyed its best week in six as a powerful rally in bank stocks on Friday steered the benchmark to a 1.7 per cent gain for the week.

The S&P/ASX 200 Index added 88.9 points, or 1.5 per cent, to 5964,9 points on Friday.

Shares of the big four banks surged on Friday on the back of reforms to the credit act to strip the corporate regulator of policing responsible lending.

Banks welcomed the changes, saying they would reduce the burden of regulation, cut red tape for consumers and allow them to approve loan more quickly. They will also help small businesses access credit, supporting employment as the economy recovers from the crisis.

Westpac was biggest winner with a 7.4 per cent rally just a day after it copped a record-breaking $1.3 billion fine from AUSTRAC for breaches of anti-money laundering laws.

NAB rallied 6.9 per cent, ANZ gained 6.3 per cent and Commonwealth added 3 per cent. NAB was the best of the big four banks over the week with a 6.3 per cent gain.

Property stocks were also buoyed by the relaxation of responsible lending rules. Mirvac gained 3.3 per cent on Friday, while Stockland added 2.2 per cent.

Elsewhere among blue chips, Woolworths fell 0.2 per cent, CSL added 0.1 per cent and Telstra added 0.7 per cent.

BHP added 1.9 per cent, Rio Tinto gained 0.8 per cent and Fortescue Metals Group lost 0.3 per cent.

The big three iron ore miners were among the worst blue chip performers over the week as price for the steel making raw material continued to pull back from highs earlier this month of more than $US130 a tonne. Iron ore is currently fetching around $US113 a tonne.

FMG fell 2.9 per cent over the week, while Rio Tinto fell 2.6 per cent. BHP inched 0.5 per cent lower.

Tech stocks tracked a volatile week on Wall Street. The S&P/ASX All Technology Index rose 1 per cent over the week.