The new and approved code of conduct for Australian bankers

Photo; Cameron Spencer/ Getty Images.
  • ASIC has approved, with some changes, the Australian Banking Association’s new Banking Code of Practice.
  • The Code will be enforced by the Banking Code Compliance Committee, an independent monitoring body.
  • It’s all about restoring community trust in the banks.

The corporate regulator ASIC has approved the Australian Banking Association’s new Banking Code of Practice, a significant milestone in a program to restore community trust in the banking industry.

ASIC says it only gave approval of the code following a comprehensive independent review and extensive stakeholder consultation.

The banking association made additional significant changes to satisfy ASIC.

And further changes may be ahead, depending on the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

“ASIC may review its approval of the Code in light of the Royal Commission findings,” the regulator says.

The Code will be administered and enforced by an independent monitoring body, the Banking Code Compliance Committee (BCCC).

The full text of the code can be found HERE.

Here’s an overview:


  • Fees and commission on lenders mortgage insurance will be abolished. A fact sheet on the key policy features will be provided.
  • A delay in offering add-on insurance for credit cards and personal loans.
  • Reminders when an introductory credit card offer is about to end.
  • Measures to assess a customer’s ability to repay their entire credit card limit within five years.
  • Proactive contact with customers deemed at risk of financial difficulty.
  • A commitment to take extra care with vulnerable customers and to train staff to help.
  • Active promotion of affordable banking products.
  • Assist people on low incomes to pick the right accounts for them including low or no fee accounts for pensioners and concession.
  • Give customers lists of direct debits and recurring payments making it easier to switch.

Small Business

  • Simplified loan contracts written in plain English.
  • Contracts with fewer conditions for those with loans under $3 million.
  • More notice when loan conditions change.
  • Improved communication and greater transparency when using valuers and insolvency practitioners.
  • If a small business, with loans under $3 million, has met their loan repayment terms a bank will not take enforcement action against the business (unless they fall within a limited area including bankruptcy, broken the law or loss of a licence to continue to operate).


  • Protections for guarantors to ensure they understand their obligations, including a cooling off period and advocating that they seek independent legal advice to ensure they understand what they’re signing.
  • If borrowers get into financial difficulty, or their circumstances change, the guarantor will be notified.
  • The bank will first attempt to receive assets from the borrower before starting action against the guarantor to repay the loan.

Enforcement and Compliance

  • The independent Banking Code Compliance Committee (BCCC) will investigate any alleged breaches of the Code, make findings and recommendations relating to breaches and apply sanctions.
  • The BCCC can formally warn a bank, publicly name a bank for breaches and new powers include, requiring a bank to rectify or take corrective action in cases of serious breaches, ordering them to undertake a compliance review, requiring a bank to train staff, and reporting serious, systemic and ongoing issues to ASIC.

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