Former Attorney-General Philip Ruddock admitted he urged the Abbott government to initiate an inquiry into the Commonwealth Bank of Australia's treatment of Bankwest customers after being approached by three Liberal Party branch presidents in his electorate.

Mr Ruddock said it was his idea for the parliamentary inquiry to investigate if the Commonwealth Bank engaged in "constructive defaults" by deliberately forcing Bankwest clients into receivership to boost its profits, a key allegation made for years by a small group of unhappy Bankwest customers.

The veteran MP's key role in setting up the inquiry, which was highly critical of the bank and could lead to tougher rules on lenders, and his close personal and political relationship with three anti-CBA campaigners was revealed by The Australian Financial Review on Friday.

Former attorney-general Philip Ruddock with property developer and Liberal Party branch president Yves El Khoury and his wife Leila, who were part of the campaign over shutting off credit to Bankwest customers. Facebook

The inquiry helped fuel hostility towards the whole bank industry and build support for a royal commission into banks, which is Labor Party policy.

Mr Ruddock said he suggested the inquiry to Assistant Treasurer Josh Frydenberg - not Prime Minister Tony Abbott, as claimed by one of the Bankwest campaigners, Peter McNamee. Mr Ruddock previously said he couldn't remember his role.