Customer-owned banks such as co-ops and mutuals say regulatory changes flagged by Treasurer Scott Morrison will help the sector to grow and compete on a level playing field with other banking organisations.
Releasing a review of customer-owned banks on Wednesday, Mr Morrison said he wants to "unshackle" the sector and intends to proceed with all its recommendations, which include allowing better access to capital, and has written to the regulators encouraging their support.
"The mutual sector has become an orphan effectively under our legislation ... it is important that we change that," the treasurer told reporters in Sydney on Wednesday.
Shadow assistant treasurer Andrew Leigh welcomed the government's commitment, saying Labor announced similar initiatives a year ago and expects the measures will be delivered in a bipartisan fashion.
"As the first spokesperson of a major party to have designated responsibility for member-owned firms, I call on the government to also commit to giving member-owned firms eligibility to access government grants on an equal footing with other organisations," Dr Leigh said in a statement.
The Customer Owned Banking Association welcomed Mr Morrison's response to the review conducted by Greg Hammond, a lawyer specialising in banking governance, supervision and regulation.
"Greater capacity for customer-owned banking institutions to raise capital will increase their potential to grow, take opportunities and invest in technology," the association's acting CEO Dominic Dunn said.
