Political pressure is mounting on the federal government to support a wide-ranging Senate inquiry into bank fees and interest charges, with the Greens and Labor agitating for a clampdown on ATM and credit card fees.

Labor senator Sam Dastyari believes ATM fees are too high, particularly the so-called “foreign transaction” fee levied when a customer withdraws cash from an ATM not owned by their own bank.

Banks are reaping profit margins of more than 100 per cent on foreign transaction fees.

According to research published by the Reserve Bank last year, the average cost borne by banks for issuing cash from an ATM is only 77 cents.

But most banks charge $2 on foreign ATM withdrawals, which delivers them additional income of about $600 million a year.

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While the major banks have copped most of the criticism levelled against the industry on ATM fees, Bendigo Bank emerged recently as the worst offender.

In January, The New Daily revealed that Bendigo Bank actually charges its customers for using their bank’s own ATM network.

Holders of Bendigo’s Blue Debit and EasyMoney cards are slugged 70 cents each time they make a withdrawal at one of the bank’s ATMs.

CHOICE has described Bendigo’s ATM fee structure as “indefensible”.

The controversy over ATM fees is likely to strengthen the push by Labor and the Greens for an inquiry into the banks’ pricing tactics after the Senate Economics committee last month highlighted potential price gouging on credit card rates by the banks.

“Recent falls in interest rates are not being passed on to credit card holders,” Mr Dastyari said.

“While interest rates are at a record low, credit card interest rates haven’t budged.”

The difference between what it costs banks to fund credit card lending and the rates they charge customers has blown out to record levels in the last 12 months.

In evidence given to the Senate committee last month, senior officers of the Reserve Bank and Treasury were unable to explain why credit card interest rates had not fallen since funding costs began to reduce three years ago.

As reported previously in The New Daily some credit card issuers such as GE Money charge interest of more than 20 per cent on some cards.

The cost of funding credit card lending for big banks is under 8 per cent.