Two of the majors are now clashing head-on and soon enough, experts are expecting to see a four-corner brawl from Australia's biggest banks, a competition that should be fierce enough it would blow some burdens away from banking clients' shoulders.

The initial volley of fire came from the National Australia Bank (NAB), with its surprising offer to prospective clients of paying for their mortgage exit fees should they opted to switch their loans from Commonwealth Bank of Australia (CBA) and Westpac.

Not to be outdone, Westpac immediately tossed its own allure by announcing that its annual fess for specific mortgages has been scrapped and more, the bank now offers discounts that could lead to savings of hundreds of dollars.

Meanwhile, as the remaining big two, ANZ Banking Group and CBA, observe the tiff from the sidelines and ponder hard what to do next, the federal government quickly entered the fray with Federal Treasurer Wayne Swan proudly claiming that the bruising tactics the nations now sees from the giant banks were the results of the government's handiworks.

Swan did not hide his happiness on the spectre of more wars being unleashed as the banks expectedly pull their sleeves up and perhaps get dirty just to win more consumer sentiments as much as they can.

The treasurer stressed on that "it's about time they had a scrap, it's about time we had a bit of competition."

However, analysts are actually cautious of the unravelling scenarios. While they noted that consumers indeed would come out as the big winner of the escalating competition, bank investors may have to prepare for profit declines as Credit Suisse analyst Jarrod Martin observed, "This actually looks like the beginning of a price war and, ultimately, we're just going to lower industry profitability."

Still, consumer group Choice is having some reservations on the unfolding events as its director, Christopher Zinn, dared the big banks to actually flash the concrete results of the offers they are currently pushing.

Zinn acknowledged that NAB achieved some sort of coup when it rolled out its incredible offer, which he described as a mould-breaker that carries fantastic differentiation, but he stressed that consumers have yet to appreciate the real "substance beneath the style."