Federal treasurer Wayne Swan needs to act now to steer a much needed banking reform in the country in light of the record profits being amassed by major banks and their interest rates that seem to veer away from Australia's official cash rate.

This according to opposition spokesman Joe Hockey as he called on Mr Swan to reveal his reform measures that would encourage more competition in the banking sector, which he stressed is lacking at the moment.

The federal treasurer hinted on Tuesday that reform is on the way following the Commonwealth Bank of Australia's (CBA) move to lift its interest rate by 45 basis points, which came right after the Reserve Bank of Australia's (RBA) surprise decision to go for a rate hike of 25 basis point to 4.75 percent.

Also on Wednesday, Westpac Bank reported that it had netted earnings after tax of $6.35 billion that surpassed the $5.6 billon profit earlier announced by CBA, obviously prompting Mr Hockey to ramp up his calls on the federal government to step in with its reform plans in the industry immediately.

Mr Hockey told ABC that competition in the sector has been effectively nil since the onset of the global financial crisis yet the government seem unperturbed by the development and with recent actions by major banks that essentially disregarded RBA's official policy rate, he further stressed that government intervention is more pressing at this time.

CBA's decision to lift its rate beyond the levels determined by the RBA earned the ire of both the government and the Coalition as Mr Swan warned that he may not be rushing on government's intended reforms in the banking sector but his approach would certainly lead to a more competitive environment in the industry.

Mr Swan hinted on an ABC interview that once government reforms were put in place, "it will put pressure on the major banks to behave in a better way and to ensure that their competitors can provide the fierce competition which existed prior to the global financial crisis."

Industry experts observed that the unpopular moves being dispensed by major banks lately were actually deliberate but would only last for a while as they projected that interests rates would be eventually reduced once cost pressures ease down, which should happen very soon.

With more public attention being trained on the latest banking issues, the Senate decided to dip its fingers too with an official inquiry spearheaded by Senator Nick Xenophon, who is more convinced now that an investigation by the chamber would lead to eventual reforms in the banking sector.