The country's major banks are poised to face a Senate inquiry as the Coalition backed an initiative made by an independent senator calling for an investigation on whether the Australian banking sector is marred by unfair practices being observed by industry players.

Independent Senator Nick Xenophon earned the support of the opposition on Thursday as he urged his colleagues to start an investigation in the economics reference committee that would scrutinise the state of competition in the industry.

Senator Xenophon said that he is convinced that Australian consumers were not getting fair treatment from the banking sector, specifically from the country's major banks, as he cited that bank customers were being ripped off through exorbitant fees and charges.

He added that Australian banks impose interest rate margins that were unparalleled from anywhere else in the world, compounding the woes already burdening bank depositors and clients.

The independent senator said that the senate inquiry would also focus on questionable fees and charges, the banks' products and services and the current issue of allegedly insufficient competition between banks and non-bank providers.

Senator Xenophon told ABC that banks' attached charges on ATM transactions were too much and many Australians were fed up by the unfair practices currently wielded by the banking players.

He said that along with his proposed investigation on industry practices, he would like to ascertain if regulations currently in placed were discouraging competition and eventually discard the likelihood of "future change and innovation in the sector."

The proposal for a senate investigation came amidst brewing controversies in the banking industry, which was further highlighted by dizzying profit results turned in by major banks with both the National Australia Bank (NAB) and Australia & New Zealand Banking Group (ANZ) reporting a combined profit of close to $10 billion this week.