Banks 'have no reason not to pass on latest interest rate cuts'

There is nothing to stop Australia's major banks passing on the latest cut to national interest rates to their customers.

This is the opinion of treasurer Wayne Swan, who has insisted that lenders are in a position to trim their own rates, despite the fact many have already stated that they cannot afford to.

He told Network Ten that the largest banks in the country are very profitable.

"Of course they would argue that the cost of their domestic deposits has gone up … I just don't believe it is justified," he was reported as saying.

The Reserve Bank of Australia lowered the official cash rate to 3.5 per cent earlier this week – a drop of 25 points.

This followed on from a 50-point reduction at the start of May, although very few lenders passed the saving on to home and business loan customers in its entirety. This angered many people, who labelled the banks as greedy.

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