Opposition finance spokesman Charles Mangion has criticised the major local banks for not reducing their interest rates on lending, in line with the ECB rate cut announced last week.

He also criticised HSBC - without actually naming it - for having actually raised its premium lending rate from 1.5% to 2.5%.

Dr Mangion in a statement said that one recognised that the banks needed to protect the interests of their shareholders and savers.

However, while they looked after their interests, the banks also needed to evaluate the domestic situation in the context of the international scenario. They had to ensure that their decisions did not hinder economic development.

"The banks must not be an instrument which raises the cost of borrowing, for both individuals and economic operators. At the same time, they must safeguard the interests of depositors."

Dr Mangion also urged the Competition Office to consider whether the fees imposed by the banks as administrative costs were fair or whether they were an abuse of dominant position.

He said that in such testing times for the economy, all sectors must do their part for the country to continue to move forward.

A spokesman for HSBC said the bank had not raised its base rate, which remains at 2.5% per annum.