The model was jointly developed by Bendigo, AWA Credit Union, Berrima District Credit Union, Circle Credit Co-operative, and Service One Credit Union.
Under the terms of new banking model, the loans and deposits of the participating credit unions will be transferred to Bendigo Bank, while reserves remain 100% member-owned.
In a joint statement, Bendigo managing director Mike Hirst, and Service One chief executive officer and Alliance spokesman Peter Carlin said the model was compelling enabling the credit unions involved to remain true to their traditional ideals and values while positioning for growth in the changing financial market.
Carlin said: "By working with Bendigo to develop the Alliance model we have been able to achieve the best of both worlds for our members and for the communities we serve.
"At the same time the agreement with Bendigo opens up greater capacity to meet our members’ needs, offer greater competitive choice and provide access to a wider range of services and modern service technologies."
The alliance model will make Bendigo the approved deposit-taking institution and responsible for compliance, systems and balance sheet management, delivering improved economies and cost savings.
The alliance members would continue to be serviced by their local branch staff, and will also have access to new Bendigo products and technology.
As part of agreement, the credit unions should secure approval from 75% of members on 10 December, and final approvals from the Australian Prudential Regulation Authority and the Federal Treasurer.
The four credit unions combined have 39,000 members and are expected to transfer nearly $550m in loans and around $620m in deposits.
