The Commonwealth Bank of Australia has agreed to be supervised by the banking regulator and will add another $1 billion in capital to shore up its balance sheet from scandals after a major investigation found the bank's culture wanting.

A review commissioned by the Australian Prudential Regulation Authority into CBA's culture found the board of the bank had "inadequate oversight" of non-financial risks, including reputational risks. The review also found a sense of complacency within the bank when addressing non-financial risks.

The review found a sense of complacency within the bank when addressing non-financial risks. Credit:James Alcock

APRA chairman Wayne Byres said the inquiry's findings showed CBA’s governance, culture and accountability frameworks and practices were in need of considerable improvement.

"As the panel notes, CBA has itself identified and begun taking steps to address many of these issues, but there is much to do and a risk that the same issues which have led to the need for the inquiry undermine the bank’s efforts to comprehensively and effectively respond to the recommendations of the panel," he said.