ASIC has approved a new version of the Australian Banking Association’s Banking Code of Practice. The new Code won’t commence until the end of February 2025.
ASIC yesterday said that “following a period of extensive ASIC-led consultation, the ABA agreed to address critical gaps flagged by stakeholders, resulting in a strengthening of standards and a retention of key protections for consumers and small businesses.”
The improvements in the February 2025 Code include:
• expanding the definition of a small business from $3 million in aggregate borrowings to $5 million, meaning around another 10,000 businesses will be covered,
• greater clarity on the types of support available to all customers, including financial difficulty options for small businesses,
• revised inclusivity and accessibility for customers, including via interpreter services,
• new provisions for deceased estates,
• broadening the definition of financial difficulty, and
• clearer protections for loan guarantors.
ASIC said it sought to ensure there was no diminishment of key Code protections, including the requirement to act with the care and skill of a diligent and prudent banker for consumer borrowers and their guarantors.
ASIC’s approval of the new Banking Code of Practice follows an independent review of the code in 2021, public consultation by ASIC on a revised code from November 2023 to January 2024 and engagement with the ABA, consumer groups and other interested stakeholders.
ABA CEO Anna Bligh said this Code “will provide an even higher standard of customer protections for Australians.
“Banks are focused on delivering the highest standards of customer service to all Australians, and the Code is a fundamental part of ensuring this happens.
“This is a Banking Code with teeth. Customers can continue to take complaints to the Australian Financial Complaints Authority or the courts who can then take strong action when necessary.
“The Banking Code Compliance Committee will also continue to independently monitor compliance by banks.”