Prime Minister Kevin Rudd has urged the banks to reconsider their decision not to match a Reserve Bank rate cut.

The central bank cut its official cash rate by a quarter of a percentage point to a 49-year low of three per cent on Tuesday.

So far, only the Commonwealth Bank of Australia has announced a cut to interest rates.

But it shaved just 10 basis points from its standard variable mortgage rate, much less than the Reserve Bank’s 25 basis point reduction.

National Australia Bank (NAB) said higher funding costs prevent it from passing on any portion of the rate cut, while ANZ Banking Group and Westpac have yet to make an announcement.

Mr Rudd said he wanted the banks to reconsider their decision not to match the central bank rate cut.

“This decision is disappointing and I’d urge them to reconsider,” Mr Rudd told ABC Television.

“We are in constant dialogue with the banks about a range of things.”

The prime minister said the banks had matched most of the Reserve Bank’s 425 basis points in rate cuts since September.

AAP