No, it's just because they can get away with it and there's no competition in the banking industry.
PTSB have a problem with their reserves.. they need more deposits and less loans. Their solution is to give a punitive loan rate, while a ridiculously high deposit rate of interest (over 3% when the ECB rate is only 1%)
The Irish banking system in dysfunctional and it's because of the behaviour of banks like PTSB.
The government is failing spectacularly in ensuring a functioning banking sector.