Cass-Gottlieb said the ACCC had no powers to set deposit pricing, and the inquiry was aimed at investigating how banks set rates. She said the inquiry would take in areas including strategies used by banks to attract clients; how they observed and responded to competitors; how banks reacted to changes in the cash rate; and whether there were barriers to customers switching.
In response to the probe, bankers have pointed to savings rates of about 4 per cent that are available if customers meet certain conditions, such as making a monthly deposit and growing their balance.
Treasurer Jim Chalmers has said banks have taken longer to pass on higher interest rates to depositors than mortgage customers.Credit:Alex Ellinghausen
They have also argued competition for funds is picking up, following a period when banks had a large amount of household deposits due to a surge in saving during the COVID-19 pandemic.
Westpac chief executive Peter King highlighted the increase in competition for funds on Friday, saying the bank did not fund itself at the official rate set by the Reserve Bank.
“When we price for products, you always think about supply and demand. For us, in the last little while, we’ve been well funded and that does influence how you think about your pricing in deposits and in wholesale markets,” King said at an Australian Banking Association lunch in Sydney.
“As it’s got more competitive, the price of deposits has gone up.”
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As well as using its powers to demand internal data and documents from banks, the ACCC is likely to speak with regulators, receive submissions from industry and consumer groups, and hear from customers.
Canstar last week said rates on promotional accounts, which pay an introductory rate for a limited time, had increased by an average of 3.19 percentage points since the Reserve Bank started raising interest rates last year.
In contrast, it said savers who had passed the introductory period for these accounts would have seen a 1.32 percentage point increase in their base rate.
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