VH-TFB was inbound to Sydney from Canberra and had been instructed to descend to 5,000ft for an approach to runway 16R. At the same time, VH-WMY was inbound to Bankstown from the north, maintaining 3,000ft. VH-TFB was subsequently observed by radar to descend to 3,200ft, about 1 NM from VH-WMY. The pilot of VH-TFB was given traffic on the other aircraft and instructed to immediately turn left and climb to 5,000ft. This instruction was complied with promptly. The pilot of VH-WMY was visual between cloud layers and became aware of VH-TFB as it turned and climbed. The pilot of VH-TFB later reported having been distracted whilst flying through a line of thunderstorms, associated with heavy rain and turbulence, and had inadvertently descended below his assigned altitude.