Overdraft lending rates for small and medium-sized businesses have remained virtually static for the last three months despite April's 50 basis point cut to the official cash rate, new Reserve Bank data shows.

Despite growing debate about banks' interest margins, Prime Minister John Key yesterday indicated a Parliamentary inquiry was unlikely.

The RBNZ has updated its base business lending rate data having refined the way it calculates the information. The prevailing rate for May was 9.82 per cent, just 3 basis points below the 9.85 per cent recorded during April and March.

Last month the Business Herald reported business borrowing costs had barely budged since the central bank began cutting less than a year ago.

Then, the base interest rate offered to new business borrowers, weighted by market share of the lender was 12.39 per cent in March against 13.66 per cent before the RBNZ began cutting the OCR in July last year.

While one bank insider suggested the data was "meaningless" and not an accurate indicator of prevailing rates, the RBNZ maintained it was a relevant indicator.

However, the central bank has since altered the way it prepares the information and its website says the data is "the base rate for overdraft lending on specific business (non-farm) loan products mainly for small-to-medium enterprises (SMEs)".

"In aggregate, borrowing subject to these rates is around 5 per cent of all non-farm business borrowing from registered banks.

"For individual businesses, overdraft loans subject to a BBLR [base business lending rate] will normally comprise only a component of their overall bank credit facility, and may remain undrawn at times."

According to the new formula the BBLR was at 12.25 per cent in May last year.

At its present level it has fallen 2.43 percentage points since then against a 4.49 percentage point fall in variable mortgage rates over the same period.

ANZ National Bank chief economist Cameron Bagrie said yesterday business lending rates had not fallen as far as mortgage rates because the level of risk in business lending increased more during recessions as businesses were at greater risk of failing.

Last week National MP Craig Foss who is chairman of Parliament's finance and expenditure committee said the committee's concerns about a lack of pass-through of OCR cuts to lending rates were around short-term business lending.

"We have lower interest rates in New Zealand than we've had for a long time so it's one of the positive ticks for our economy but particularly at that front end, at that working capital end, that does not seem to be flowing through and they are the underlying concerns."

Labour finance spokesman David Cunliffe and the Greens have called for a Parliamentary inquiry into banks' interest margins.

Yesterday, Prime Minister John Key indicated that was not likely. "I am not sure an inquiry would achieve lot," he said at a post-Cabinet press conference.