An exporters group has used a banking inquiry by opposition parties to call for monetary policy reform.
The two-day inquiry is being conducted by Labour, the Greens and the Progressives and aims to to get to the bottom of whether or not banks are ripping off customers.
The Australian-owned banks and the Reserve Bank are not taking part, while Parliament's finance and expenditure committee earlier decided that an inquiry was unnecessary.
The Manufacturers and Exporters Association, the Council of Trade Unions and Anglican Social Services made submissions on Thursday.
John Walley, of the Manufacturers and Exporters Association told MPs that a failure by banks to pass on all reductions in the Official Cash Rate meant his members debt-related costs were 25% higher than they should be.
Mr Walley said the Reserve Bank's inflation-targeting policy was not working and was hurting exporters.
He said the supply of credit should be regulated as a way of dampening rising house prices and taking pressure off the exchange rate.
Charles Waldegrave, of Anglican Social Services, told MPs that the poor pay more in interest and failure to pass on cuts in the Official Cash Rate hurt them more than the wealthy.
Earlier, the Council of Trade Unions said borrowing overseas by banks has undermined the Reserve Bank's ability to influence the economy.
The CTU said domestic borrowing costs are being dictated by the interest rates on foreign money markets where banks raise funds.
It said this is undermining the Official Cash Rate and should be regulated.
On Wednesday, KiwiBank chief executive Sam Knowles told the inquiry the cash rate has little influence over domestic bank rates. The Official Cash Rate is currently 2.5%.
Mr Knowles said trading banks are operating in a competitive market and the differences between their interest rates primarily come down to strategy.