An independent review of the Code of Banking Practice by board performance and governance advice specialist Phil Khoury calls for a comprehensive rewrite of the code. The review was announced in April last year by the Australian Bankers Association, with Khoury appointed in July. In his report, published earlier this week, Khoury says the revamped code should:•    avoid duplicating legislation;•    not include detail of how obligations will be met as this should, to the extent practicable, be set out in supporting guidelines rather than in the code itself in the same way that regulations can provide the detail absent in statute law;•    allow room for banks to choose how they achieve (or exceed) the standards, although "this must not be misunderstood as freedom to lower or avoid standards";•    not mandate measures that carry substantial costs for the banking system unless the measures are likely to achieve well-defined and targeted policy aims;•     not unreasonably or unfairly limit customers' choice; and•     once rewritten, should be approved by ASIC.The review comes "at a time when community pressure on the banking industry is high," Khoury notes, and is part of a commitment "to win back a greater level of trust".The thought of fronting up to another Parliamentary grilling in a few weeks is also no doubt adding to the urgency to sharpen banks' commitment to responsible lending. As a starting point, Khoury argues for a complete re-write of the code, which has only been in place in its current format since 2013. Nonetheless, it was, he says, "drafted in ... a style that is no longer good practice and has been overtaken by more modern codes, by regulatory guides and policy and by the Industry's own policy documents."The "excessively legalistic terms and conditions, provisions that give the bank what seems to be unfair power, fees that are seen to be 'hidden' or out of proportion and so on, all contribute to a sense that a customer cannot 'just trust' their bank.""Exceptions and carve outs generally complicate the code and diminish the strength of the promises made by the code, [and] ... contribute directly to external mistrust dimensions of high-handedness or 'trickiness'," Khoury warns.This is in addition to "niggling and continuing problems" experienced by a comparatively few customers with day-to-day issues such as direct debits and recurring credit card payments."These issues simply must be fixed, otherwise they will continue to undermine goodwill towards the banks." Looking at where specific changes could be made, Khoury notes that the obligations imposed by the code on banks for retail customer lending duplicated those imposed by the National Credit Code, and in those areas the code could be simplified.On the other hand, an updated code - as recommended in his report - is needed to give small businesses, along with guarantors, additional protection and rights.And, with regard to guarantors, Khoury agrees with the ABA's suggestion that "it would be useful" if the code clearly states that a guarantor is entitled to expect the bank to take care