BANKING ACT 1959 - SECT 50
Control of interest rates

(1)     The Reserve Bank may, with the approval of the Treasurer, make regulations:

          (a)      making provision for or in relation to the control of rates of interest payable to or by ADIs, or to or by other persons in the course of any banking business carried on by them;

          (b)      making provision for or in relation to the control of rates of discount chargeable by ADIs, or by other persons in the course of any banking business carried on by them;

          (c)      providing that interest shall not be payable in respect of an amount deposited with an ADI, or with another person in the course of banking business carried on by the person, and repayable on demand or after the end of a period specified in the regulations; and

          (d)      prescribing penalties, for offences against the regulations, not exceeding:
         (i)        if the offender is a natural person—a fine of $5,000; or

                   (ii)       if the offender is a body corporate—a fine of $25,000.

Banks need reining in, but an act is not the way - SMH  -  October 22, 2010  -  Milind Sathye professor of banking and finance at the University of Canberra and previously worked for the Central Bank of India

          "Parliament has already conferred powers on the government to control interest rates, under section 50 of the Banking Act 1959. The section also provides for imposition of a financial penalty on banks that defy the directive."

Extract from Bank Finance and Regulation Survey -  Clayton Utz  2011 - page 15:

"Section 50 of the Banking Act 1959 (Cth) (the Act) currently authorises the Reserve Bank of Australia (RBA), with the approval of the Treasurer, to make regulations controlling the rates of interest payable to or by authorised deposit-taking institutions. The formal power of the RBA to control interest rates by regulations co-exists with the much broader general power of the Governor-General to make regulations under s 71 prescribing matters which are necessary or convenient to be prescribed for giving effect to the Act. There are no enacted regulations pursuant to s 50 of the Act."

 

Refer:  Chapter 17