Opposition Leader Bill Shorten has labelled Prime Minister Malcolm Turnbull's response to the banks' failure to pass on a full interest rate cut as empty, weak and pathetic, and again called for a royal commission into the financial services industry.

This week, the big four banks held onto a combined total of roughly $917 million after deciding to pass on only half of the Reserve Bank's 0.25 percentage point rate cut – now at a record low 1.5 per cent – to mortgage holders.

The Prime Minister responded by saying the banks' costs had been lowered and the savings should be passed on to customers, or a proper explanation provided, as they operate with a "very substantial social licence".

According to the Opposition Leader, Mr Turnbull's "empty talk on the big banks is weak and pathetic".