Bank lending rates have moved in line with funding costs over the past year, a Reserve Bank of Australia report says.

The conclusion isn’t likely to lay to rest persistent concerns the banks aren’t “passing on” cash rate changes to borrowers.

But the message that borrowers end up paying just the interest rates the RBA wants was still reiterated in the report by RBA researchers Benn Robertson and Anthony Rush.

“The Reserve Bank Board takes these developments into account when it determines the appropriate setting of the cash rate to ensure that the structure of interest rates faced by households and businesses is consistent with the desired stance of monetary policy,” they said.

The report, published by the central bank on Thursday, found banks’ funding costs fell during 2012, but the fall was less than the cut in the cash rate set by the RBA.

“This largely reflected a sustained increase in the cost of deposits relative to the cash rate,” the report said.

“While the average cost of total deposit funding for the major banks is estimated to have declined by 90 basis points (0.9 percentage points), this was less than the 125 basis point reduction in the cash rate over the year.”

Deposits now account for more than half of bank funding, they said.

The report found that the average interest rate on outstanding variable-rate housing loans rose by about 40 basis points relative to the cash rate.

“This increase is consistent with the overall increase in banks’ funding costs, suggesting that risk margins were largely unchanged,” the report said.

For business loans, about two thirds have interest rates set at a margin over market yields on bank bills, tradable securities issued by large businesses to borrow money.

Since 2009 that margin has not varied much, the report found. However, since late 2011, there had been a tendency for spreads on lending facilities to decline for larger business but to drift higher for smaller businesses.