Banks only borrow from the RBA for nightly inter bank...

Banks only borrow from the RBA for nightly inter bank settlement. It has a pretty irrelevant effect on bank profitability.

A more important issue is that of "reserves" - which is liquid assets that the banks must hold to ensure that they can pay out on liabilities (deposits). Currently the reserve requirement is 1/20 of the liabilities (during the GFC was 1/50, and because the banks held so little reserves the RBA felt the need to guarantee the deposits to stop a run on withdrawals).

An even more important issue is that of equity = assets - liabilities, which is approximately loans - deposits.

If the value of the loans was to diminish (say because of bad debts, or house valuations decreasing) sufficiently, then the bank would be bankrupt. I'm not suggesting that the NAB is anywhere near there, but it gives a clue as to why Australian banks could be a little nervous in a falling housing market and may feel a need to increase their assets and hence reserves.