Suncorp-Metway, Bank of Queensland and Bendigo and Adelaide Bank are preparing submissions for the inquiry, the first public review of the guarantee, which was introduced in November to counter the freeze in international debt markets.

The inquiry will look at the effects of the funding guarantee and those of its counterpart on bank deposits on the financial sector. It is due to report in September.

While the industry has largely welcomed the funding support for helping keep credit flowing through the lending system, it has been criticised by regional financiers for its differing levels of prices that makes it more expensive for smaller banks to use.

For the AA-rated majors — Commonwealth, Westpac, National Australia Bank and ANZ — that translates into a fee of 0.7 per cent over the market interest rate of the cost of the debt they raise.

But an A-rated bank such as Suncorp pays 1 per cent while Bank of Queensland, with its BBB rating, is charged 1.5 per cent.

The regionals have argued that they are already paying more to raise debt to underpin their lending needs to reflect their lower credit ratings and that the higher fees have only added to their costs.

That has been one of the main reasons why the smaller banks have sparingly used the guarantee.

The industry has used the guarantee to raise more than $100 billion in new short-term and long-term debt at a cost of more than $200 million in fees.

The submission from Bank of Queensland will argue that the pricing of the levy is "anti-competitive" and is helping the Big Four to offer lower-cost loans.

"It has created a very uneven playing field, making it difficult for regional banks to build shareholder value and at the same time remain a competitive alternative in the marketplace," Bank of Queensland chief executive David Liddy said in a speech last week.