NAB in November revealed about 2300 home loans may have been issued without accurate information or documentation since 2013.
"The breadth of the misconduct, both in number of bankers and loans and the number of years over which the misconduct occurred, warranted further explanation in these hearings", Orr said.
The problems were identified in 2015 through NAB's whistleblower program.
Cases of improper lending have already been addressed by banks and the Australian Securities and Investment Commission, resulting in many cases in fines against banks and refunds to clients.
Australia's Royal Commission into misconduct of the financial sector began its first public hearing on Tuesday with a focus on residential mortgages, auto finance, and credit cards. NAB has previously admitted errors in the introducer programme, under which the bank rewarded people who referred customers for home loans.
"They should not have happened in the first place, and they show that we haven't always done right by our customers or treated the community with respect".
Several major banks, including the National Australia Bank (NAB), the Commonwealth Bank, Westpac and ANZ, as well as other financial entities, are among the institutions facing the investigation of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, reports Efe news.
The assistant counsellor of the inquiry, Rowena Orr, said that residential mortgages represent about two-thirds of total loans granted by Australian banks.
The long-awaited Royal Commission follows years of scandals in Australia's financial sector including poor financial advice, interest-rate rigging, and accusations of breaking money-laundering rules. Australia's big banks are among the most profitable in the world, earning profit margins of 36.4 per cent in the June quarter of 2017, according to a paper published by the commission on February 9.