Greens call for ban on banks exceeding Reserve Bank rate rises

BANKS would be banned from raising interest rates over the official RBA cash rate under new plans from the Greens.

ON HOLD: The big banks would be limited to the RBA's official interest rate rises for two years under Greens plans.

BANKS would be banned from raising interest rates above official levels for the next two years and the coal seam gas industry would be temporarily halted under new plans from the Greens.

Greens leader Bob Brown said his banking legislation would also force lenders to immediately pass on any Reserve Bank moves to lower interest rates.

Senator Brown said the debate about reining in the banks was yet to produce any action and called on the Coalition to back his laws.

"Sound and fury's not good enough, this is hurting people," he said yesterday.

"We want the Opposition to join the Greens to enable this legislation to go through before Christmas."

While both major parties are unlikely to support regulating the banks, the proposed laws will further fuel the debate about interest rate rip-offs amid swelling bank profits.

Last week, Westpac, National Australia Bank and ANZ all followed the Commonwealth Bank's lead with rate rises above the Reserve Bank's official levels.

The Greens will today introduce the banking legislation, which will also seek to outlaw $2 ATM fees.

Treasurer Wayne Swan yesterday blasted the big banks for what he said was a "culture of arrogance and contempt" for the community.

He vowed he would take further action next month to improve competition after moving on mortgage exit fees.

"The banks shouldn't mistake our methodical approach for a lack of determination to do even more to make the banking system work for Australians," he said in his weekly economic note.

"It's critical we get these reforms right so they are effective and enduring."

The Greens have accused the state and Federal Governments of being blinded by money to allow the development of coal seam gas and coal mining, so turning Queensland into the world's pollution quarry.

However, Infrastructure and Planning Minister Stirling Hinchliffe said the approvals took years of "rigorous environmental assessment" and the Greens were part of the Australia's greenhouse problem.

"They are the people to blame for Australia not having an emissions trading scheme," he said.

"We would be better off if there was a moratorium on Greens doing politics."