ANZ Bank made Australian banking history on Friday the 13th by making good its previous announcement to set its interest rates independent from the overnight cash rates made by the Reserve Bank of Australia (RBA).

The bank, which made a fortnightly rate announcement policy, kept its mortgage rates unchanged at 7.3 per cent for January.

"By reviewing key variable lending rates each month we can more accurately reflect the sustained changes in funding costs we incur through the interest rate we pay to customers for their deposits and to investors in wholesale money markets," ANZ Australia Chief Executive Philip Chronican said in a statement.

In December, the bank - together with the three other large Australian banks - was pressured to pass in full to customers the 25-basis point rate cut made by the RBA. However, after it lowered its interest rate, ANZ said that beginning 2012 it would make announcements on its rate decisions every second Friday of the month. Mr Chronican said the bank wants the process of setting interest rates for ANZ clients to be simple and transparent.

ANZ's variable reference rate for small businesses is at 10.74 per cent. Its standard variable rate for home loans is slightly higher than National Australia Bank's 7.22 per cent, but is lower than Westpac's 7.36 per cent and Commonwealth Bank of Australia's 7.31 per cent.

"It helps is to contribute to an informed debate about how we fund our customers' loans and the effects of the continuing global financial crisis on Australia, particularly the significant economic instability which currently exists in Europe," Mr Chronican added.

The RBA cut rates by 25 basis points each successively in November and December 2011 which brought the current benchmark lending rate to 4.25 per cent. Market observers are forecasting at least two more interest rate cuts in the first quarter of 2012.

Australia's central bank will not meet in January, but analysts foresee at least another rate cut in RBA's first meeting for the year in February. Futures markets analysts are even speculating that interest rates could plummet by 100 basis points which would bring down the overnight cash rate to 3.25 per cent in August.

Besides interest rate cuts, there are also hints of job cuts in Australia's banking industry, particularly for the four large banks in a bid to reduce staff cost. Reports said that the big four spend 60 per cent of the $32 billion expenditures it makes yearly on staff.

Despite an 11.5 per cent hike in profits that the Australian banks made in the last financial year which hit $24.2 billion, Commonwealth Bank is said to likely reduce expenses by 10 per cent, Westpac is planning to cut 1,600 jobs and ANZ reportedly is working on a new redundancy programme.

Outside of the big four, the Royal Bank of Scotland's branch in Australia is also expected to lay off 170 workers from 600 positions in the country.