As banks persist to battle for retail investors' cash to meet central bank requirements, there is a probability that the higher deposit rates would become part of the landscape, says the Financial Services Cooperative PSIS.

“The big Australian banks' need to source more cash domestically will keep rates high and put pressure on lenders' interest rate margins. This comes as the mutual prepares for downward pressure on its own profitability after it posted record net earnings of $13.1 million last year”, said Girol Karacaoglu, the Chief Executive.

A year ago, PSIS had heightened its overall deposits to $1.12 billion from $1.07 billion, and Karacaoglu had declared that they had attained an 85% reinvestment rate from depositors.

He had also remarked that the new cash had split 50/50 from fresh and existing members. By means of extracting more from its existing members rather than hounding for new clients, the firm planned to focus on ‘original growth’.

Karacaoglu also said that, the PSIS as of yet hadn't ascertained whether to apply for the Government's annex to the retail deposit guarantee scheme, having not needed to call on the preliminary programme, though it has eligible with a credit rating of BB+.

In face of an anticipated consolidation in the sector, the PSIS was not investigating any union and acquirement activity at present and also the Company was optimistic about the stance for non-bank deposit takers, saying the lender was accommodating of the new prudential oversight non-banks faced.

Potential returns are being explored by the firm for its 130,000 members, for example the dividend payment or more striking lending and deposit rates in excellent years.