Retail banks should open their books to satisfy customers that cuts in the official cash rate were being passed on, Finsec general secretary Andrew Casidy says.
The union, which represents bank workers, was sceptical borrowers would receive the full reduction of yesterday's 0.5% cut in the OCR.
There had been increasing concern raised by customer representative groups over recent months that banks had not been passing on the full reductions in the OCR, Mr Casidy said yesterday.
The banks had responded that the cost of borrowing overseas left them unable to pass on the full interest rate reductions.
"It is impossible for customers to understand if interest rates are fair when the whole process is so mysterious.
"Banks should disclose their costs of borrowing and the interest rates they charge to the Reserve Bank."
The Reserve Bank could publish the information and customers could use it to decide if their bank was being fair in what it charged and how it compared with other banks, Mr Casidy said.
Westpac New Zealand was the first to respond to the Reserve Bank's cut by slicing 0.4% off its six-month fixed loan, taking it to 5.39% from today.
That was the only rate Westpac changed.
Westpac product management general manager David Cunningham said that already home owners on floating-rate loans were benefiting by what amounted to more than $1.4 billion a year through reduced interest rates.
In the next 12 months, more than half of all fixed-rate home loans - worth more than $60 billion - would roll over.
That had the capacity to move households from a current average interest for those loans of about 8.25% to rates nearer 6%, releasing an additional $1.4 billion a year into the economy, he said.
The influential 90-day bank bills fell to 2.86% from 3.04% on Wednesday.
