The corporate regulator has approved a new Banking Code of Practice, marking the first code in the finance industry to receive such approval.
The new code, which updates the current code in place since 2013, has been agreed with The Australian Securities and Investments Commission after it was submitted to the regulator in December 2017, and aims to set enforceable rules for banks around behaviour, responsible lending, greater financial protection and increased transparency.
CEO of the Australian Banking Association, Anna Bligh, said the new code, which will need to be implemented by signatory banks by July 2019, will introduce a range of new measures to make banking products easier to understand and more customer-focused.
“Customers will see real tangible benefits, including more information about changes to their accounts, delay in offering on add-on insurance products and simpler contracts, with fewer conditions for small business loans,” Ms Bligh said.
For the first time, there is a new dedicated section on small business lending and another on inclusive and accessible banking. In addition, in certain matters relating to small business and or agribusiness, the independent Banking Code Compliance Committee, which is responsible for monitoring compliance, will appoint an independent expert to assist.
Westpac chief executive Brian Hartzer said Westpac “fully supports” the new Banking Code which he describes as one part of how the bank is strengthening transparency and relationships with customers.
“We have worked with the industry to completely rewrite the Banking Code which sets out the industry’s key commitments and obligations to our customers,” he said.
Ms Bligh said the approval process had been rigorous and comprehensive, with a number of changes made to the draft to satisfy ASIC requirements.
“Banks understand that Australians have high expectations and know that they have a big challenge ahead of them. The new Banking Code of Practice marks an important step in the right direction.”
The next review of the code will take place in three years.