"It reminds me of Jim Hacker in Yes Minister visiting St Edwards, a hospital that had no patients," an incredulous Labor MP Matt Thistlethwaite told Commonwealth Bank of Australia boss Ian Narev after grilling him about an "independent" report into its life insurance division.

"You've got a report based on victims, that's arisen because the victims have been denied claims, but don't interview anyone covered by the policies," he said at the banking tribunal on Tuesday. "It is ridiculous. It beggars belief."

Thistlethwaite was referring to the Deloitte report, which was commissioned after a joint media investigation found rampant misconduct inside the bank's life insurance division, including selling outdated medical definitions and putting profit before customers.

The report, which found no evidence of systemic issues, has been criticised as too limited in its terms of reference, including not speaking to customers.

Narev revealed the CommInsure board paid for the report and wrote the terms of reference.

But he repeatedly told members of the tribunal that APRA considered the Deloitte report robust and independent.

That prompted a swipe from Thistlethwaite: "APRA will get their two bobs' worth on that."

Financial planning

Narev answered a range of questions including some about its financial planning division and in particular the case of a 97-year-old woman who still hadn't been fully repaid years after dodgy financial adviser Don Nguyen had given her inappropriate advice.

He was quizzed about a landmark report from ASIC in October that estimated hundreds of thousands of customers had been charged $178 million for financial services they never got. CBA was the worst offender, accounting for $105 million.

Narev was also asked whether he thought there might have been problems in the banks after they moved from a service-based culture to a sales-driven culture.

All questions were valid.

Royal commission

But the question of the day was why CBA didn't just agree to a royal commission and get it over with. With 20 different inquiries being conducted into the banks, it was the obvious question.

The banking inquiry was called by Prime Minister Malcolm Turnbull as a substitute for a royal commission. But the more we see the chief executives in action, slickly dodging and weaving questions and making motherhood statements, the more the case grows for a royal commission.

Narev gave his usual response: "The message that the convening of a royal commission would send about policymakers over the last decade, regulators over the last decade, bank management and governments over the past decade would not be positive for the industry, would not be positive for strength and would not be positive for the perception of our industry as unquestionably strong," he told politicians.

Is the implication they should be beyond scrutiny?

David Murray's financial system inquiry concluded our banks are "unquestionably strong" and have capital ratios in the top quartile internationally. The banks' strength and standing with international investors is not the issue.

The flaw in the well-trotted out argument against a royal commission is that investors place their money where they get the best return. It is why recent financial scandals, no matter how egregious, have had little or no impact on the share prices of the banks.

The issue is trust. This was no more evident than a recent global banking survey by Ernst & Young that found four out of five Australian customers say they don't trust their bank to give unbiased advice and put their interests first.

Banks trade on trust, and for the past few years that trust has been breached as they built cultures based on profit before people - they sold inappropriate products, delayed or denied life insurance policy claims and failed to pass on interest rate cuts across home loans, small business loans and credit cards.

Narev did little to appease many of the politicians that lined up to question him, even those who don't agree with a royal commission.

At the end of the day there has been little or no accountability. When committee chairman David Coleman asked Narev if any senior executives had been removed given the recent scandals, including CommInsure, financial planning or rate rigging, the response was no.

Bank executives do an important job and they are well rewarded. It is why they should be accountable when things go seriously wrong in their division. Until the banks stop hiding behind the "few bad apples" cliche and start shouldering the blame with actions, little will change.