This week, the big four banks held onto a combined total of roughly $917 million after deciding to pass on only half of the Reserve Bank's 0.25 percentage point rate cut – now at a record low 1.5 per cent – to mortgage holders.

The Prime Minister responded by saying the banks' costs had been lowered and the savings should be passed on to customers, or a proper explanation provided, as they operate with a "very substantial social licence".

According to the Opposition Leader, Mr Turnbull's "empty talk on the big banks is weak and pathetic".

"Yet again he has just wagged his finger at them and delivered another empty lecture. He is too weak and his government is too divided to stand up to the banks," he said.

Mr Shorten said Australians were "rightly angry" about the banks' decisions and confidence and trust continued to be eroded in the financial services industry.

"Mr Turnbull will give the big banks another empty lecture and a tax cut. I'll give the banks a royal commission."

In April, Labor announced its intention to set up a royal commission into the banks following a string of ethical and financial scandals.

Independent MP Andrew Wilkie, who supports the proposal, said the banks are just profit-building.

"We need to understand that about half of that rate cut that is not going to be passed on effectively goes straight to the banks' bottom line," the crossbencher told Sky News on Thursday morning.

"So on top of that $15 billion profit the banks have made in the last six months, they can count on an additional $1 billion in profit in the next six months."

Mr Turnbull and Mr Shorten are meeting in Sydney on Thursday to discuss the referendum on Indigenous recognition and the same-sex marriage plebiscite.

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