Commonwealth Bank chief Ralph Norris sent a clear signal yesterday that faced with the rising cost of offshore funding, and ever-increasing competition for local deposits, interest rates on home loans were likely to increase independent of any moves by the RBA."The movement of bank-funding costs is impacted by more than just movements in the RBA cash rate," said Norris, during an address at a Committee for the Economic Development of Australia function in Sydney yesterday."Continued volatility means that we are paying more for funds," he said.Norris explained that around 40 per cent of CBA's funding comes from offshore sources and that "the cost of raising five-year debt in mid-2010 compared with same period before the crisis has increased by around 140 basis points."At the same time, there was increasing competition within the financial sector to attract retail deposits to offset the requirement for offshore funds. Competition was only going to increase, he warned, as more international financial institutions sought to reap the benefits of a comparatively strong Australian economy by entering the local market.This quest for funds was being compounded by regulatory reform, which called for banks to increase their liquidity levels, Norris explained.Norris sought to justify the need to raise rates independent of any RBA moves by noting that "remaining profitable enough to retain our AA rating will be important to be able to access capital at reasonable cost."CBA hinted to investors, following its full-year profit in August, that it was likely to lift margins on home loans but did not do so.