Approval given on the proposed Banking Code of Practice changes
On 17 December 2019, ASIC gave the final approval for the new version of the 2019 Banking Code of Practice that incorporates the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The changes recommended, and now approved by the ACCC and ASIC include:
- ceasing default interest on agricultural loans while farms are affected by drought or natural disaster;
- providing inclusive and accessible banking services to those with limited English and those living in remote areas; and
- removing informal overdraft and dishonour fees on basic, low fee or no fee accounts for concession card holders.
Other changes to the Banking Code of Practice include:
- improvements on lending to Small Business provisions;
- extending protections to guarantors of small business loans; and
- clarifying the restrictions on non-monetary defaults on small business loans.
CEO of the Australian Banking Association, Anna Bligh has spoken about how the approval of these changes will benefit customers and ensure all banks have a standard basic, low fee or no fee account for low income earners and ensure there is a ban on charging default interest on distressed agricultural loans for farmers subject to droughts and natural disasters.
These changes will be implemented through the new Banking Code of Practice by 1 March 2020.