CALLED TO ACCOUNT: Banks to front Canberra

BANK chief executives will have to report to a federal parliamentary committee at least every year under new measures the Prime Minister and Treasurer announced this afternoon.

Following the Reserve Bank's decision to cut interest rates by 25 basis points and the failure of the four major banks to pass on the full cut, Prime Minister Malcolm Turnbull announced that banks would have to provide a full account to an economics parliamentary committee to explain how they managed affairs.

Mr Turnbull said this would create a regular and permanent method for banks to be held accountable.

"The banks should have passed on the full rate cut," he said.

Mr Turnbull said there was no basis for the banks not passing it on, other than to improve their profitability.

He said the banks' chief executives would have to face the committee at least once a year to give evidence and answer questions from people who Australia had elected.

"I believe this will help drive a stronger culture of accountability on the part of banks," he said.