The Turnbull government has welcomed the banking regulator’s decision to launch an independent inquiry into the Commonwealth Bank, but critics say a royal commission is still “desperately needed”.

The Australian Prudential Regulation Authority (APRA) announced on Monday that it would investigate the bank’s governance, culture and accountability practices following a string of scandals.

It comes as the financial intelligence agency AUSTRAC pursues the bank in Federal Court over allegations it broke anti-money laundering laws nearly 54,000 times.

Treasurer Scott Morrison welcomed the move, but said that although he had been in discussions with regulators about the AUSTRAC case, the government did not instigate the inquiry.

Scott Morrison says a royal commission is not necessary. Photo: AAP

He also dismissed calls for a royal commission, saying the government had instead adopted a “just do it … Nike approach” by increasing powers for regulators.

“The things that a royal commission could potentially recommend, we’re already doing that,” he said.

“Increased powers and resources for ASIC – tick, done, swoosh.”

Despite the move, the Turnbull government will continue to face pressure from the Opposition and crossbench MPs for a fully fledged commission of inquiry into the financial sector.

Labor accused the government of “double speak” for describing the APRA inquiry as “action” while opposing a royal commission.

“While Labor welcomes today’s announcement by APRA to establish an independent inquiry into the Commonwealth Bank following years of scandals and the recent serious allegations of corporate failings by AUSTRAC, we still strongly believe a royal commission is needed,” Shadow Treasurer Chris Bowen said.

Queensland MP Bob Katter told The New Daily a royal commission was “desperately needed”.

He said if Mr Joyce was knocked out of Parliament by the High Court, royal commission supporters in the lower house would “have the numbers”.

That was because he was confident Nationals MP George Christensen would cross the floor to support Mr Katter’s bill to defeat the government by one vote.

Mr Christensen was contacted for comment.

Tasmanian lower house MP Andrew Wilkie, who also has his own bill for a royal commission, told the The New Daily that a “couple of inquiries here and there just won’t cut it”.

“APRA’s decision to investigate the Commonwealth Bank is welcome although the only way that the community can have real confidence in the banking sector is with a royal commission,” he said.

The inquiry, which which be paid for by the bank and made public, will see APRA appoint an independent panel to examine the practices.

Chairman Wayne Byres said public confidence in the bank had been hurt by the ongoing scandals.

He said the inquiry would identify any organisation or cultural issues within the bank.

Commonwealth Bank chief executive Ian Narev said it had the bank’s full support.

“An independent and transparent view on the work we have done, and the work we still have to do, is an important element of strengthening trust,” he said.

“So this inquiry has our full support, to ensure it is as effective as possible.”

The Australian Banking Association has argued a royal commission will hurt the industry’s reputation in global markets.

-with ABC