Can the new Code of Practice restore the reputation of the Banks?

Can the new Code of Practice restore the reputation of the Banks?

Aussies everywhere, unless they are in the minority of mattress money hoarders, will likely be happy to know about the initiation of a new banking Code of Practice, approved by the Australian Securities and Investments Commission on Tuesday this week.

The rewrite, which CEO of the Australian Banking Association, Anna Bligh says aims to be more consumer-friendly and transparent, was submitted to ASIC for final approval in December 2017 and will be fully implemented by July 2019. It was originally put forward by ASIC in 2015, prior to the commencement of the royal commission hearings. After the series of scandals uncovered in recent months, Bligh hopes that the new Code will take an important step forward in restoring the reputation of Australia’s banking industry.”

“The new Code will introduce a range of new measures to make banking products easier to understand and more customer focussed”, says Bligh “it represents a stronger commitment to ethical behaviour, responsible lending, greater financial protection and increased transparency.”

Training and care

Under the Code, there will be a commitment to training staff to take better care of vulnerable customers, such as Indigenous customers, people on pensions, and those with disabilities.

Assistance for those on low incomes in getting the right accounts for their circumstances will also be provided; customers in these situations will be made aware of accounts with low or no fees attached.

Customers who are deemed at risk of financial difficulty will also have measures put in place to help them.

More manageable debt

Banks will make it easier to cancel credit cards, inform customers when their interest-free period is ending, and implement more responsible lending conditions, including credit limits that are repayable over a five-year period.

Commitments to reducing the hard sell of products to customers of personal loans, such as insurance, that are unwanted or unnecessary have also been promised.

The new Code could mean good news for potential home owners, as there will no longer be fees and commission on lenders mortgage insurance, and fact sheets on policy features will be provided as standard.

Action to protect the rights of guarantors of loans will also be implemented.

Small business protection

As well as customers, moves are being made to protect the interests of small businesses, such as the simplification of contract jargon, and limits imposed on the conditions of loans of under $3 million. Banks will increase communication with small businesses, giving them more notice when conditions change and being more transparent when using valuers and insolvency practitioners.


“The new Code must have teeth. A key part of that will be ensuring that oversight body, the Banking Code Compliance Committee, has the resources and sanctions it needs to hold the banks to account.” said Consumer Action Law Centre CEO Gerard Brody, “Let’s not forget that many cases at the Hayne Royal Commission have been clear breaches of the old Code that were never enforced.”

The new Code will be under stronger enforcement by the independent Banking Code Compliance Committee, in an attempt to severely limit breaches. The BCCC will be given more power, enabling them to publicly name banks and condemn any breaches and issue formal warnings.

The Code will also be reviewed every three years, as opposed to the previous implementation of a five-yearly review.

Is it enough?

As pointed out by consumer groups, there are gaps in the Code. Some of these include:

  • Debt collection: Recent news had shown that some debt collectors, such as ACM Group, have been found guilty of misconduct; banks have not committed to accountability for debt collectors behaviour.
  • Fees: High fees like overdraft fees and late payment fees on credit cards deal those in hardship the biggest blow, and banks will continue to charge them even under the new Code.
  • Direct debits: Tighter regulations on banks cancel direct debits upon request have not been mentioned under the new Code.
  • Credit Cards: The ABA has imposed a five-year payable credit card debt, but consumer groups believe that this should be reduced to two years.

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Learn more about bank accounts

How can I check my bank account balance online?

Checking your bank account balance online is a simple process. Once you’ve logged in to your online banking, clock on the relevant account and the balance should be visible.

How do you open a bank account under 18?

If you’re under 18 and you want to open an Australian bank account, you will need your passport or birth certificate. (Some lenders might require just a Medicare card or driver’s licence.) You can apply online or at a branch. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

How can I deposit cash into my bank account?

The traditional way to deposit cash into your bank account is to go to a branch and give it to a teller. These days, many banks will allow you to make deposits through an ATM as well.

How do I close my bank account online?

You can usually easily open a bank account online, but you often can’t close it online.

Many banks and credit unions will only let you close an account if you go into a branch or call them on the phone.

However, some banks will let you request to close the account via your internet banking. Check your financial provider’s website for details.

Just remember: If you still have funds in the bank account, transfer them to another account, or withdraw the cash. Also, if you have any payments like direct debits going in or out of the bank account, these will also stop when you close your account.

Can I open bank accounts for my children?

A common question for new parents is, ‘Can I open a bank account for my child?’

The short answer is yes – as a parent you can open a bank account for your child.

Once you’ve compared your options and found a bank account that suits your needs, the process is relatively simple.

As the bank account is for your child, you’ll need to provide some documentation such as proof of ID, including your tax file number.

You will also need a copy of your child’s birth certificate, and in some cases you may also need to sign a guarantee of indemnity.

Depending on the bank and whether you’re an existing customer, you may be able to open a bank account for your child online. However, you may still need to go into a branch to prove your identity.

Can you open a bank account at 16?

Yes, you can open a bank account at 16, or even younger. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

How do I open a new bank account?

There are a number of ways to open a new bank account – online, over the phone or in the branch. The trick is to decide what type of bank account you want beforehand.

It might sound like a simple enough task, but there are literally hundreds of bank accounts to choose from. And each offer their own banking features and benefits.

A comparison site like RateCity can help you work out what bank account product matches your needs.

Once you’ve made up your mind what you want, it’s advisable to have the following information ready for the application process.

  • A couple of forms of identification (such as driver’s licence, Medicare card, passport)
  • Tax file number
  • Residential address, contact phone number and email (though email is not essential)

How do you deposit change into your bank account?

One way to deposit change into your bank account is to visit a branch. Many lenders will also allow you to deposit your change through one of their ATMs.

Can Centrelink access your bank account?

Yes, Centrelink can access your bank account, but only if you give them a reason to. Centrelink uses data-matching software with other federal government agencies to help it crack down on welfare cheats.

This is why it’s important to give true and matching information to all government agencies.

For example, if you report to Centrelink your annual income is $25,000, but at tax time you report your income as $50,000 with the ATO, it’s likely you’ll be ‘red flagged’.

At this point, Centrelink can legally request that your bank hand over your personal bank account details, to review your finances.

In most cases, Centrelink does not have the authority to take money out of your account. You will usually be given written notice to repay the debt.

However, Centrelink can also reduce your benefits until you’ve paid back what you owe. In extreme cases, Centrelink can garnish your wages and assets (including money in your bank account) until your debt is repaid.

Can I link a bank account to Paypal?

Paypal is a safe and convenient way to pay online without the need to share your financial details. You can send and receive money or accept credit and debit cards as a seller using Paypal.

It’s easy to link your bank account to a Paypal account and start making transactions within minutes.

To start, you first need a Paypal account (it’s free to join). When setting up your Paypal account, you will be prompted to link a credit card or bank account (or both if you wish).

PayPal works without a balance; you can use Paypal to shop or send money when your balance is zero.

When your Paypal balance is zero, Paypal will ask you to choose your preferred payment method at the checkout.

This could be either your linked bank account or credit card. Your bank details can be updated if you change banks or credit cards.

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.

Can a debt collector garnish my bank account?

A debt collector can garnish your bank account, but only with a court order. This drastic action is usually taken only if you’ve ignored several notices asking you to pay the debt.

If this happens, there is nothing you can do to stop it other than immediately pay back your what you owe in full or make arrangements to pay it off in installments.

Once a garnishee order is issued, your bank will put a freeze on your account as it processes the order. This usually takes two to three days and you won’t be able to access any of your money during this time.

If you have Centrelink payments, they may be protected, depending on what the court order says.

Can I start a bank account online?

Yes, most lenders that operate in Australia will let you set up a bank account online. The process is usually simple and takes five to 10 minutes. You will probably need to provide a passport or birth certificate, as well as a driver’s licence, Medicare card or another form of secondary identification. Requirements differ from lender to lender, so some institutions might ask for more or different forms of ID.

Can I find my bank account number online?

Yes, you can find your bank account number by logging into your online banking and clicking on the relevant account.