News: Australian lawmakers recommend banking complaints tribunal

• Recommends setting up customer complaints tribunal by July 2017
• Tribunal to make binding decisions, reduce lawyers' involvement
• Opposition Labor Party continues to call for Royal Commission

A group of Australian lawmakers recommended a banking customer complaints tribunal should be set up by July next year, to make binding decisions while minimising the involvement of lawyers, amid rising dissatisfaction with the country's financial system.

The recommendation, however, failed to dampen calls from the opposition Labor Party for a Royal Commission, or a powerful judicial inquiry into the broader financial industry plagued by a series of scandals involving misleading financial advice, insurance fraud and alleged interest-rate rigging.

According to the latest recommendation contained in a report by a cross-party parliamentary committee, banks should make public their reports of regulatory breaches, including names of the senior executives responsible for the teams.

The report also says the government should ease requirements for new banks to make it more easy for start-ups to compete against the country's top banks, known as the 'Big Four'.

Commonwealth Bank of Australia (CBA), Westpac (WBC), Australia and New Zealand Banking Group (ANZ) and National Australia Bank (NAB) together account for about 80 percent of lending in Australia.

The committee, however, stopped short of requiring full bank account portability, which would allow customers to retain the same account number if they switched banks, due to concerns over the potential cost of such a move.

A banking and financial sector complaints tribunal, to be paid for by the banks, should start operating by July 1, 2017, the committee recommended in its report.

The tribunal - which would replace the existing financial ombudsman service, the credit and investments ombudsman and the superannuation complaints tribunal - would be free for consumers to access, operate without lawyers to the extent possible and have the power to make binding decisions, the report added.

None of the 'Big Four' responded immediately to requests for comment. Their chief executive officers have all previously agreed in principle to the idea of a banking tribunal in their testimony before the parliamentary committee.

"Many of the committee's recommendations build upon reforms already underway to make banking better for all Australians," Australian Bankers' Association CEO Steven Munchenberg said.

The committee, comprising 10 lawmakers, was established by the centre-right coalition government. Earlier this year, the government rejected the opposition's calls for a Royal Commission - the most powerful investigative body in Australia with the power to recommend prosecutions and new legislation.

"The only way to achieve any form of justice for the victims of the banks, and the only way to truly shine a light on the practices that drive unethical behaviour in the banking industry, is to hold a Royal Commission," said a dissenting report by Labor members of the parliamentary committee.