Watchdog is prowling banks: Turnbull

Malcolm Turnbull says the corporate watchdog is best placed to investigate possible misconduct in the banking industry.

The Australian Securities and Investment Commission has launched legal action against National Australian Bank "for unconscionable conduct and market manipulation", which Labor says shows the need for a royal commission into the financial sector.

"The watchdog is on the job, the watchdog is sinking its fangs into a few suspected culprits and doing his job," the prime minister told reporters on the NSW south coast on Wednesday.

Opposition Leader Bill Shorten is worried about consumers, including mortgage holders and self-funded retirees, being ripped off.

"It is a scandal that three of our four banks are now being investigated for rate rigging," he told reporters in Brisbane on Wednesday.