Australian Bankers' Association Inc.

  • Increase font size
  • Decrease font size
  • print this page
  • email a friend


Improved Code of Banking Practice

Rights for customers and more assistance for those most in need

Sydney, 31 January, 2013: The Australian Bankers’ Association (ABA) has today released a revised Code of Banking Practice, with improved rights for customers. The Code is contractually binding on subscribing banks and sets out the minimum standards banks have agreed to follow when dealing with personal and small business customers.

Steven Münchenberg, Chief Executive of the ABA, said “The Code of Banking Practice sets out the commitment banks have made to their customers, whether individuals, families or small businesses. The Code sets the standards for fairness, transparency, behaviour and accountability that customers can expect from their banks.”

“Customers want to be confident that their bank will do the right thing by them, and the Code is an important element in giving the assurance that we will. The Code gives customers additional rights, on top of those in the law, and provides straightforward ways for customers to complain if they feel their bank has not met its Code obligations.”

The improved Code has been released following an extensive independent review and consultation process.

Mr Münchenberg said “We have added new provisions to the Code, especially to provide additional support for those in the community who need it most.”

Significant changes to the Code include:

  • New and stronger financial hardship provisions that mean banks will need to be more alert to people who may be in financial difficulty in meeting their repayments, respond promptly to requests for assistance, and ensure bank staff are well trained in understanding the bank’s financial hardship commitments;
  • A commitment not to combine accounts or assign debt when a bank is actively considering whether a customer is in financial difficulty;
  • A commitment to provide information about no or low fee accounts to customers if the bank becomes aware the customer has a Commonwealth concession card, such as a Seniors Health Card, Health Care Card or Pensioner Concession Card;
  • Clarification that chargeback rights exist for disputed transactions on relevant debit cards, including debits under recurrent payment arrangements;
  • New provisions for customers in remote Indigenous communities, including making relevant information accessible, providing assistance to customers to meet identification requirements and appropriately training relevant staff to be culturally aware;
  • A commitment that banks will only sell debts to third parties that agree to comply with the ‘Debt Collection Guideline: for Collectors and Creditors’; and
  • A commitment to send customers with a mortgage, on a primary place of residence or residential investment property, an annual reminder about their insurance obligations.

Mr Münchenberg said “Banks are committed to acting fairly, responsibly and transparently – the revised Code reinforces these industry values.”

“For example, banks are committed to working with customers who may be experiencing financial hardship. There are times when any one of us can suffer a setback that means we can no longer meet our financial obligations, like paying the mortgage or credit card bill. This can happen because our working hours have been reduced or we’ve even lost our job, because of unexpected illness, because a relationship breaks down, or for a host of other reasons. It’s at times like these that banks can help people get through their financial difficulties and back on their feet.”

The Code of Banking Practice also covers small business customers. As well as the existing obligations to small business customers, banks have committed to a new notice requirement that will see them normally give at least 10 days notice before making any necessary materially adverse changes to a small business customer’s terms and conditions.

All significant retail banks in Australia are signatories to the current Code, including the major banks, regional and smaller Australian banks and international banks operating in Australia.

The banks now have twelve months to make changes to their systems, processes, documentation or training to make sure they are compliant with the revised Code by 1 February 2014. The ABA understands all current signatories are working towards adopting the revised Code.

Mr Münchenberg said “If a customer feels that their bank has not met its obligations under the Code or has fallen short of expectations, they should first complain to the bank. If they are still not satisfied, they can complain to the independent Code Compliance Monitoring Committee (CCMC) or to the bank’s external dispute resolution scheme the Financial Ombudsman Service (FOS) if the customer is claiming a loss. Both the CCMC and the FOS can investigate allegations of a breach of the Code.”

“Once a bank has committed to the Code of Banking Practice, it becomes part of the enforceable contract between the customer and their bank. A breach by a bank is a breach of that contract.”

The new Code is available from the ABA website:

While the commitments in the revised Code have been determined solely by the banking industry, the ABA would like to thank all those that provided input into the review, and in particular:

  • Jan McClelland, who conducted the independent review;
  • Code Compliance Monitoring Committee;
  • Australian Securities and Investments Commission;
  • Financial Ombudsman Service;
  • Consumer Action Law Centre;
  • Financial Counselling Australia;
  • Consumer Credit Legal Centre;
  • Salvation Army;
  • Reconciliation Australia;
  • Brotherhood of St Laurence;
  • Kildonan Uniting Care;
  • Victorian Council of Social Service;
  • Good Shepherd Microfinance;
  • COTA Australia; and
  • National Information Centre of Retirement Investments.

Background notes for editors:

The original Code of Banking Practice commenced in November 1996, to set standards of good practice which guide banks in their relationships with their personal customers.

The Code is a voluntary code in the sense that a bank has a choice whether to adopt it. Any bank, whether it is a member of the ABA, or not, is free to adopt the Code.

Once a bank has adopted the Code, it becomes part of the bank’s contract with its customers. So if a bank breaches the Code, it has breached its contract to the customer.

The ABA has created the concept of there being one Code with individual versions. Consequently, there are some quite complex transitional provisions in the Code to cover both existing subscribers and any new subscribers.

The CCMC can only consider allegations of a breach of the Code; it does not determine broader complaints or claims for financial loss. Such claims should be referred to FOS.

Download a copy of the revised Code of Banking Practice and Frequently Asked Questions, and other related information from the ABA website: If you would like us to send you a copy, free call: 1800 009 180. Copies of the revised Code will be available from banks once they choose to adopt the Code (by 1 February 2014).

For further information:

Iain McDonald
P&L Corporate Communications
Phone: 02 9231 5411
Mobile: 0488 390 151
Twitter: @austbankers


As a subscriber, you will be notified when new media releases are posted to the website.

Subscribe to the newsletter

Doing it tough?

Doing it Tough is an initiative setup by the Australian Bankers' Association (ABA) to help Aussies who are Doing it Tough Financially

Visit the Doing it tough website

What's New

Linking banks and strong Economic Growth

The ABA has published a research paper, “Linking Banks and Strong Economic Growth” setting out why productivity reforms are so important. Read more >

Audit Confirmation Request Information

Contact details for Auditors requesting bank audit confirmations. Read more >