Scott Morrison has dismissed suggestions banks could be forced to compensate customers to make amends for harm caused by dodgy loans.

The prime minister denied the government was considering giving the industry watchdog more wide-ranging powers to force lenders to cover subsequent customer losses such as jobs, cars or houses.

Mr Morrison said the government wouldn’t pre-empt recommendations from the banking royal commission about the powers of the Australian Financial Complaints Authority.

“I can’t really comment on something which has not come from the government and is not currently under consideration by the government,” he told reporters in Sydney on Tuesday.

Mr Morrison said he was at a loss over the source of a media report about the government considering beefing up AFCA’s powers, brushing off the story as “industry scuttlebutt”.