National Australia Bank has red-flagged 40 postcodes where business and personal loans are in higher risk of default because areas over-rely on single industries for growth, have high unemployment, or property prices have run too hard.

NAB chief risk officer David Gall said rising interest rates and unemployment were the two biggest risks for the Australian banking sector, and investigation of pressure points needed to examine the micro-level of Australia's 2500 postcodes.

In its 40 hotspots, NAB is conducting a more stringent assessment of loan applications, including increasing the amount of equity that borrowers require.

"We do have higher-risk postcodes, and we make calls on what we think is the appropriate loan-to-value [LVR] ratio in those higher-risk postcodes," Mr Gall said.