The new Banking Code of Practice comes into effect today, marking an important milestone in the industry’s commitment to providing important protections for customers.
The updated Code, which was approved by ASIC in June 2024, strengthens protections for customers in certain areas, particularly for people experiencing vulnerability, and reinforces the commitment of banks to responsible and fair conduct.
New and strengthened commitments in the Code include:
- An expanded definition of a small business.
- An improved definition of vulnerability that has broader characteristics and recognises the potential for anyone to become vulnerable at any time.
- Enhanced inclusivity and accessibility, with a new obligation to refer customers to free external support, such as interpreter services.
- More stringent requirements relating to selling debt to third parties.
- A new obligation to take reasonable steps to meet with prospective guarantors.
- More prescriptive obligations for managing deceased estates to improve the process.
Importantly, the Code retains key protections such as the diligent and prudent banker obligation, ensuring a continued focus on appropriate lending.
We welcome the implementation of the new Code and acknowledge the ongoing commitment of the banking industry to our independent monitoring role. We will continue to hold banks to account as they work to comply with its strengthened obligations.
About us:
Our purpose is to monitor and drive best practice Code compliance.
To do this, we:
- examine banks’ practices
- identify current and emerging industry-wide problems
- recommend improvements to bank practices
- sanction banks for serious compliance failures, and
- consult and keeps stakeholders and the public informed.
Contact details:
media@codecompliance.org.au
