She has written to the chairs of the Finance and Primary Production committees, calling for the inquiry saying that "New Zealand deserve a banking sector that is as competitive as possible".
This was agreed to as part of the coalition agreement between National and New Zealand First, said Willis.
"Growing the rural economy is critical to rebuilding New Zealand's economy and with farmers' satisfaction with banking services dropping in recent years, it's critical we better understand the role of bank competition in that sector," she said.
The Primary Production Committee had already been considering a probe into rural banking.
"That's why I have asked the Primary Production Committee to work with the Finance and Expenditure Committee to jointly develop terms of reference, join meetings to hear submissions relevant to rural banking, and prepare a report on rural banking to feed into the overall inquiry."
Willis expected the inquiry to examine the state of competition in the banking sector, including business and rural lending, barriers preventing further competition in the sector, and any possible impact of the regulatory environment on competition and efficient access to lending.
That would include seeking evidence during the from financial market regulators including the Reserve Bank, Commerce Commission, and Financial Markets Authority, she said.
"I would expect that the inquiry would, as a matter of course, hear submissions from those banks operating in New Zealand with chairpersons and chief executives being made available for questioning," said Willis.
"A more competitive economy is a more productive economy - with more growth, innovation, and investment," she said.
ACT MP and Primary Production Committee chairperson Mark Cameron said he had heard "numerous concerns" from farmers and others in rural communities about bank lending practices.
"I've heard from countless farmers about the disparity between rural and urban bank lending practices, and I have been working on this issue since I became chair last year," he said.
"Banks play an important role in our communities and we must ensure they're operating in the best interests of all New Zealanders."
He was looking forward to progressing the inquiry, he said.
RNZ
