SYDNEY, Sept 9 (Reuters) - Australia's third largest lender, National Australia Bank (NAB), defended itself on Thursday against criticism that it does not do business with any crypto currency provider, after those firms complained such conduct is anti-competitive.

NAB is one of many of Australia's top financial institutions that have not engaged with the sector, despite its huge growth in the past year, due to its high risks.

Australia's stock exchange ASX Ltd similarly has not allowed crypto-currency related businesses to list on the exchange, forcing some firms to seek public listings overseas, including on the Nasdaq.

"It's one of the emerging issues that we are looking at - what should our relationship be, if at all, with cryptocurrency," NAB Chief Executive Ross McEwan told a regular parliamentary hearing.

The bank does not have a policy excluding crypto-related businesses as customers, however it does not service any of them and would only do so if it was profitable for the bank and it could tolerate the risks, McEwan said.

"We have to look at where does crypto currency go, along with a number of parties like the reserve bank and regulators. And how do we manage it? And what's the risk inside the Bank of dealing with cryptocurrency providers as well."

Local digital currency exchanges Bitcoin Babe Pty Ltd and Aus Merchant Pty Ltd on Wednesday told a parliamentary committee exploring how to regulate the sector that none of the Big Four banks would do business with them.

Singapore-based payments and remittances firm Nium on Wednesday also said that Australia had been the only country where it had been "de-banked", out of 40 where it operates.

"Today, fintechs are always one decision away by the banks from closing their businesses," Nium APAC head of consumer Michael Minassian said. "It's time to cast an appropriate light on this anti-competitive practice."

(Reporting by Paulina Duran in Sydney; Editing by Kim Coghill)