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Australia banks rate-rigging hearing delayed by settlement talks

MELBOURNE/SYDNEY, Oct 25 (Reuters) - A hearing into allegations of interest rate rigging against three of Australia's biggest banks was delayed on Wednesday to allow more time for the lenders to negotiate a settlement with the government.

The Australian Securities and Investments Commission (ASIC) took three of country's biggest lenders - Westpac Banking Corp , National Australia Bank Ltd and Australia and New Zealand Banking Group Ltd - to court accusing them of rigging the bank bill swap reference rate (BBSW) for profit.

The first day of hearings was scheduled for Oct. 23 but the regulator asked on that day to have proceedings postponed until Wednesday after ANZ agreed to settle - a deal which still needs court approval.

On Wednesday, lawyers for ANZ and NAB said they were still negotiating settlements with ASIC and asked the court to hold over the matter until Oct. 30, a request the court agreed to.

The formal hearing would begin on Oct. 31 with Westpac alone facing the allegations if both the other banks have reached a final settlement with the regulator, the lawyers said.

The BBSW dispute has been one of several scandals engulfing the Australian banking sector which has been fending off calls for a powerful parliamentary inquiry amid accusations of widespread abuses at their financial advice and insurance units.

(Reporting by Sonali Paul in MELBOURNE and Byron Kaye in SYDNEY; Editing by Stephen Coates)