Latest: People's trust in banks 'deeply shattered', says Tánaiste

The tracker scandal resulted in thousands of mortgage borrowers being denied their right to lower-cost interest rates by banks, with some having lost their homes as a result.

Finance minister Paschal Donohoe, who has branded the behaviour of the banks as "disgraceful", has warned of tough government action if he does not see sufficient progress by mid-December on compensation, redress and offers of new tracker mortgages.

Ms Fitzgerald defended the government stance on the floor of the Dail, after Fianna Fáil's Jim O'Callaghan said the response had been "pathetic".

She then outlined the human toll wreaked by the financial furore.

"Trust has to be earned by the banks and at this point people certainly their trust has been deeply shattered," she said.

The minister said her thoughts were with every family impacted.

"The reality is it has been heartbreaking for countless families across the country who have suffered endlessly," she said.

"Some families have lost their homes and indeed some have suffered various terrible mental health stresses, marriages have been impacted and there have been years of unnecessary pressure on people who were doing their best investing in their own futures."

Update 4.30pm: The European Commission could become involved in the tracker mortgage scandal after an Irish MEP lodged a complaint with the Competition Commissioner.

Fine Gael's Brian Hayes made the submission to Commissioner Margrethe Vestager who has the power to initiate a cartel investigation.

11 Irish banks have been shown to have wrongly moved up to 30,000 people off tracker mortgages.

The Taoiseach was today asked if the banks had gotten off scot free.

"We're certainly not saying there'll be no sanctions and obviously the Central Bank, as the watchdog and regulator, is in a position to impose sanctions, and one lender has already been fined, we shouldn't forget that," he said.

"If there is evidence of fraud then there is the possibility of garda action too. Our first priority has to be the 20,000 account holders who are affected and their families."

Earlier: The Taoiseach has said if anyone believes a crime has been committed over the tracker scandal they have an obligation to report it to the Gardai.

Leo Varadkar was reacting to a question about his coalition partner, The Independent Alliance, issuing a statement through the Government Press office calling for criminal action against the banks.

Mr Varadkar would not say if there is a coalition disagreement but said he cannot personally rule that a crime has taken place and he does not have the power to send in the Gardai.

"If people believe a crime is being committed, if they have evidence a crime is being committed then they should report that to the gardaí," he said.

"Part of the investigation and the probe that the Central Bank is carrying out will examine as to whether there was collusion or fraud. There's a difference between breach of contract and criminal fraud.

"There is a difference in our law between civil matters and criminal matters," he added.