Chiefs of the big four Australian banks have spent the week defending their profits to an Australian parliamentary select committee, arguing their return on equity has slumped since the financial crisis.

The hearing follows the banks' failure to pass on the entire rates cuts by the Central Bank in August, fuelled by public concern over the provision of misleading financial advice, record profits and excessive fees.

Greg Smith from Fat Profits told Larry Williams the whole banking culture in Australia is under scrutiny.

"They've really been under the hammer I suppose, and yeah the returns to capital have been coming down in recent years, and those super-normal profits have been receeding, so let's see if that negates calls for a Royal Commission, which I think would be costly."