Recent claims that one of Australia's "big four" banks turned a blind eye to suspected cases of money laundering have come at a terrible time for the banking sector, which was already battling a major public-relations problem with its image.

On Thursday last week, it was revealed that Australia's financial intelligence agency, AUSTRAC, was investigating the Commonwealth Bank of Australia (CBA) for breaking anti-money laundering laws on 53,700 occasions, with many of those involving the bank's Intelligent Deposit Machines (IDMs).

AUSTRAC accused the bank of "serious and systemic non-compliance" of the laws, which it said led to tens of millions of dollars of drug and terror money being washed through the bank's systems.

Many of the shady deposits were made at the bank's IDMs, which failed to alert the bank of any suspicious activity. AUSTRAC has said that millions of dollars were deposited in these machines and were then immediately transferred overseas with no security checks.

On one occasion, more than 240,000 Australian dollars (188,000 US dollars) was deposited manually into one Sydney account over just three days, while it was also revealed staff at a Perth branch of the bank tried to warn superiors about the suspicious deposits but got no satisfactory response.

Each breach of the law carries a potential fine of up to 18 million Australian dollars (14.2 million US dollars), leaving the CBA with a massive potential payout that would likely lead to top-level sackings, and a falling share price.

In addition to AUSTRAC's investigations, on Friday the Australian Securities and Investments Commission (ASIC) said it too would investigate the CBA's handling of its IDMs, saying they had "commenced inquiries" into the matter.

The scandal has even prompted Treasurer Scott Morrison to turn up the heat on the "incredibly serious" and "very troubling" practices occurring at one of Australia's biggest banks.

And in news which only served to disenfranchise the public further, the CBA on Wednesday announced a record annual cash profit, totalling 9.88 billion Australian dollars (7.76 billion US dollars), a 4.6 percent increase on the previous year.

This isn't the first time the major banks have had to fend off public and government discontent. Banks have been accused in the past of colluding in refusing to pass on interest rate cuts set by the Reserve Bank while awarding significant bonuses to senior executives.

Australia's banks are also among the richest in the world, generating an annual income the equivalent of 2.9 percent GDP. By contrast, the United States' banks generate the equivalent of just 1.2 percent GDP.

Debate has raged for months as to whether the sector should be the subject of a wide-ranging Royal Commission, a move strongly supported by the Labor-led Opposition, to ensure that banks aren't excessively profiteering at the expense of customer service.

While this latest scandal strengthens claims for a Royal Commission, Morrison who was scathing of the bank's conduct on Wednesday, talked down the likelihood of one taking place.

"I think it is an epic fail and I think it's incredibly serious," he said. "At the end of the day ... the Commonwealth Bank and particularly (its) board (has) to assure the public about their confidence in that bank."