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Australia’s leading banking association has confirmed that a new code of practice is in the pipeline with all members expected to sign up once the rules have attained ASIC approval.
Anna Bligh, CEO of the Australian Banking Association, confirmed yesterday that the new code has been completely rewritten to better meet community standards and industry scrutiny.
She also stressed that all retail banks will be required to sign up to the code of practice if they wish to maintain their ABA membership.
“In the past it was up to each individual bank if they wanted to sign up however this new customer-focussed code will become compulsory for all ABA members with a retail presence,” Bligh said.
“This new code will be binding, forming part of relevant customer contracts, enforceable by law and will be monitored by an independent body,” she continued. “Australians expect their banks to operate in an ethical and appropriate way when they apply for a credit card, home, small business loan or other financial product.”
Bligh explained that the change comes as Australia’s entire banking sector looks to find ways in which it can improve conduct and culture within the industry.
“While there is much work still to be done, Australia’s banks are serious about genuine reform which addresses conduct and culture, with the Banking Code of Practice a cornerstone of these efforts,” she said. “The industry is committed to genuine reform which will rebuild trust with the Australian community, with the new code an important step in the right direction.”
Currently awaiting approval from ASIC, the code will deliver changes across the board with “plain English contracts” for small business, no more unsolicited offers to increase credit card limits, greater transparency around fees and customers having an ability to cancel a card online, explained Bligh.
Banks that have signed up are required to include a statement in its contracts that the code applies, which in turn is a legally enforceable document. There will be a 12 month implementation period for the code once ASIC has given its approval
In addition, an independent body, the Banking Code Compliance Committee (BCCC) will monitor and oversee compliance with the code.
