Australia's largest deposit holder Commonwealth Bank has warned any new levy on deposits could be passed on to customers.
A bank deposits insurance levy of 0.05 per cent on savings of up to $250,000 is likely to be unveiled in the May budget as part of a move to raise $500 million a year.
The levy was first floated by the former Labor government to pay for the scheme introduced during the global financial crisis to protect consumers if a bank collapsed.
Commonwealth Bank, which holds $450 billion in deposits, has criticised the levy in its final submission to the federal government's financial system inquiry.
Such a move "would impose an ongoing cost on industry, which may be passed on to consumers through higher fees or lower interest rates for deposit accounts", the bank said.
The inquiry, headed by industry veteran David Murray, rejected a deposit levy, and ANZ has also supported that stance.
ANZ's submission to the inquiry says the current model for the deposit insurance scheme, where deposit insurance is paid in the event of a financial collapse, should be maintained.
Other recommendations from the inquiry to further strengthen the banking sector reduce the need for an upfront levy, ANZ said.
Westpac and National Australia Bank's submissions to the inquiry have not yet been made public.
The government called for final submissions as it considers the recommendations handed down by the financial system inquiry.
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