THE big banks have gouged $7 billion from borrowers in the past two years by raising interest rates more than the Reserve Bank and refusing to pass on official cuts in full.

Analysis conducted for the Herald Sun showed banks have profited by an average of $3000 a year from each individual home owner and credit card user during the global financial crisis.

The big four banks - which were still being protected by the Rudd Government from the fallout of the financial crisis through the guarantee scheme - have repeatedly ignored pleas from Treasurer Wayne Swan to stay in step with the RBA rate movements.

Again this week the banks - which have defied the economic downturn to record multi-billion-dollar profits - snubbed their noses at customers and Mr Swan by lifting their rates higher than the Reserve Bank.

By refusing to pass on all interest rate reductions, inflating the Reserve Bank's increases, or adding hikes of their own, the banks have increased the gap between the cash rate and their interest rates by as much as 1 per cent.

Read more on the Herald Sun online.