House prices are at risk of falling in the wake of the royal commission into the financial sector, the Reserve Bank says, as banks restrict the amount of money they are willing to lend.

The central bank's deputy governor, Guy Debelle, told an audience of chief financial officers that there was a risk of a further tightening in lending standards, a sentiment echoed by the entire RBA board in its minutes released on Tuesday.

The RBA minutes showed members noted the "high level of public scrutiny of banks", which could "affect household borrowing and spending". Credit:Louie Douvis

"This may have its largest effect on the amount of funds an individual household can borrow, more than the effect on the number of households that are eligible for a loan," Dr Debelle said. "This, in turn, means that credit growth may be slower than otherwise for a time. To me, that has more of an implication for house prices, than it does for the outlook for consumption."

The RBA minutes showed members noted the "high level of public scrutiny of banks", which could "affect household borrowing and spending".