Banks are meeting their obligation to help prospective loan guarantors make informed decisions, but they could be doing more to achieve the level of "good industry practice", an independent review has found.The Code Compliance Monitoring Committee, an independent body that reviews banks' compliance with the Code of Banking Practice, decided to do a survey after receiving a number of inquiries and expressions of concern about alleged breaches of the Code provisions that deal with pre-contractual disclosures in relation to loan guarantees.In a report, issued yesterday, the committee said: "The high number of credit facilities currently supported by a guarantee indicates that these play an important part in the provision of credit, both to individuals and to business."While the number of cases where issues have arisen in respect of guarantees is comparatively small, the impact on individuals in these circumstances can be considerable."Complaints the CCMC has received include guarantors saying they had not received independent advice before providing the guarantee; the risks of a guarantee had not been explained to them; and they had no understanding of the borrower's financial position prior to giving the guarantee.Under the terms of the Code of Banking Practice, banks can't accept a guarantee until the guarantor has sought independent advice. The bank must issue a warning notice explaining the rights and obligations of a guarantor and setting out the financial risks involved.The bank should also give notice that the prospective guarantor can request information about the transaction, can limit their liability and has the right to refuse to enter into the guarantee.The CCMC found that the banks it reviewed had appropriate systems in place to manage the issue and most monitored staff compliance. It found that policies were applied consistently and there were no systemic issues.However, the CCMC's view is that the Code sets out minimum standards and that the banks have to do more to achieve "good industry practice".It said: "Some banks conducted interviews with prospective guarantors to explain commitments and risks associated with entering a guarantee. This is in addition to the provision of notices."Some banks provided additional information, such as separate brochures which explained risk and reinforced the need for independent financial and legal advice."Some banks have processes in place to identify classes of prospective guarantors, such as potentially vulnerable guarantors, and take additional steps to ensure they receive information about their rights and responsibilities."Among its recommendations, the CCMC said banks should make sure information is given to prospective guarantors in a timely manner. It said guarantors should also be given time (a minimum of 24 hours) to consider their decision after receiving advice. And it recommended that banks give extra consideration to prospective guarantors who may be vulnerable, such as elderly people, non-English speakers and people who are offering a family home as collateral.