ANZ Bank Chief Executive Philip Chronican said on Thursday that the bank would continue its rate setting policy independent of the Reserve Bank of Australia (RBA) decisions even if bank customers have expressed dissatisfaction with the lender.

He insisted the strategy is part of the bank's efforts to break the myth of the automatic link between the RBA decisions and bank borrowing costs.

"While customers have appreciated the transparency, they remain uncertain about what it will mean going forward.... But we need to assess movements across all our sources of funding, not just the cash rate. In particular, (we need to consider) the price we pay for customer deposits, and for domestic and international wholesale funding," The Herald Sun quoted Mr Chronican.

Australia is waiting for the April 13 announcement of ANZ following the decision by the RBA on Tuesday to keep the current overnight cash rate of 4.25 per cent at least for one month. ANZ, since February, had declared independence from the rate setting decisions of the Australian central bank and even hiked its mortgage interest rate while the RBA kept the overnight cash rate for the third straight banks.

The three other large Australian banks, Westpac, National Australia Bank and the Commonwealth Bank of Australia, have followed ANZ's example and raised their interest rates also, which angered Australian borrowers.

Mr Chronican insisted that because of the banking industry's competitiveness, the lender has to be ahead of other banks even in terms of interest rates.

He also expressed concern over the threat of a financial meltdown in Europe.

"There is still a risk of the debt crisis spilling into the banking sector as - because of the regulatory reform - banks now hold so much government paper, which could prove a weakness in the future," he added.

He also spoke against continued criticism of excessive executive compensation and bank profit levels. Mr Chronican pointed out that the strong banking industry was one of the key reasons why Australia withstood the global financial crisis in 2008.

"Banks provide the oxygen needed for economic growth. You simply cannot have a successful economy if you don't have a strong, successful financial system," he pointed out.

On executive compensation, he said, "We seem happy and even proud when our sports people make it onto the list of the top 20 paid people, or similarly when our entertainers make it on Hollywood's best-paid list.... Yet for some reasons when people are managing large complex businesses it is seen as excessive," The Sydney Morning Herald quoted the ANZ chief.

He favoured transparency in the disclosure of executive compensation packages, but proposed extending the disclosure to other groups in positions of power such as those managing public superannuation savings.

Mr Chronican earned $2.2 million compensation in 2011. He said the real issue is not the size of executive pay but the risks the bankers were fired to manage.

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