Parliament's finance and expenditure select committee says it has resolved to investigate further whether to set up an inquiry into bank profits.
The committee released a report last week questioning interest rates charged by banks on short-term lending, in the wake of criticism by the Reserve Bank.
The committee said on Wednesday that any inquiry would relate to the extent to which banks have passed on cuts in the Official Cash Rate since last July.
Prime Minister John Key earlier this week questioned how much could be achieved by such a move.
On Wednesday, Finance Minister Bill English told MPs on the committee that the Government's priority was to ensure a stable banking sector and that banks continued to lend.
But Reserve Bank governor Alan Bollard later expressed disappointment that the banks had not passed on April's cut in the Official Cash Rate to short-term lending rates.
Several days ago, Labour MP David Cunliffe said the banking sector's defence of its interest rates did not stack up.
On Sunday, BNZ chief executive rejected suggestions that his or any other bank in New Zealand was taking advantage of customers.
Mr Thorburn said banks were paying more to get money now than they did before. He said there was deposit pressure locally and overseas and the average bank profit had fallen 18%.
It was important to keep banks profitable, he said, so that New Zealand's banking system could stay strong.
However, Mr Cunliffe, a member of the select committee, said the stability and strength of the local banking sector could not be used as an excuse for failing to pass on cuts in short-term interest rates.
He said bank profits looked lower only because of bad debt.
