Rogue inquiry into banks

Are banks conning customers with unfairly high mortgage rates?

That's the question for a rogue parliamentary inquiry this week.

The inquiry has been set up by Opposition political parties - Labour, Greens and the Progressives - after Government MPs blocked attempts to set up an official probe.

It follows repeated concerns from the Reserve Bank that the major Australian-owned banks have set floating mortgage rates as much as a percentage point too high, costing Kiwis millions of dollars in extra interest payments each week.

Labour finance spokesman David Cunliffe said the inquiry was necessary to ease customers' concerns they were being price-gouged by banks.

He said some concerns had eased with recent figures showing bank profits had dropped in the past three months.

Cunliffe said the MPs who were hearing evidence had open minds - but needed to study facts to find out whether taxpayers were being ripped off.

"This is a fact-finding mission. It is not a kangaroo court."

About 40 submissions had been received from banking customers, interest groups and lobby groups including Grey Power, Age Concern and Federated Farmers.

Every government department has rejected the chance to appear.

Kiwibank had also put a submission forward - the only bank to do so.

Cunliffe said he believed that the Government had placed pressure on the banks not to come forward.

Finance minister Bill English's office has denied this.

Submissions to the inquiry end tomorrow. The public is welcome to attend theinquiry, which sits this Wednesday and Thursday at Parliament.