Bank complaints up 60pc despite ombudsman, Labor says

"There's already an ombudsman in place but the number of people getting ripped off has been going up and up," he said.

"A tribunal simply won't cut it. Coalition MPs are happily acknowledging 'it will be good for the banks'. We need something that's good for consumers and will improve the system, not another soft touch for the banks," he said.

"It's like sending a second ambulance when a royal commission will stop the crashes happening in the first place. Only a royal commission will deliver the systemic, structural and cultural change that is long overdue."

Push for banking victims' tribunal

Labor's renewed push for a royal commission comes after Prime Minister Malcolm Turnbull all but gave the green light to establishing a banking victims' tribunal.

The tribunal, which is being pushed by Queensland Liberal Warren Entsch and Nationals senator John Williams, would be able to make binding decisions without having to burden complainants with hefty legal fees.

Senator Williams told News Corp a banking tribunal would be a "win-win all around".

"This tribunal will [not only] be a great thing for people to seek justice, but good for banks and the financial services industry," he said.

Labor's insistence on a royal commission comes after the Commonwealth Bank warned bank credit ratings could be at risk unless the government stops "bank bashing".

The recommendation for a banking tribunal comes from a Senate inquiry report which advised lenders to engage independent experts, nominated by the Australian Small Business and Family Enterprise Ombudsman, to examine cases to determine whether victims should be compensated.