Australia’s New Code of Banking Practice has introduced extensive changes to the original Code and set even higher standards of good banking practice for banks when dealing with individuals and small business customers.

Mallesons Stephen Jaques Partner Ros Grady, who advised the Australian Bankers’ Association on the drafting of the New Code, said a lot more information will need to be provided by banks than under the previous Code, ensuring best industry practice standards were achieved.

The New Code sets out clearer, more comprehensive commitments by the banks to their customers related to providing good banking services, such as continuously working toward improving the standards of practice and service in the banking industry; promoting better informed decisions about banking services; and acting fairly and reasonably towards customers in a consistent and ethical manner.

Operational from August next year, the New Code requires banks to act fairly and reasonably to customers in a consistent and ethical manner. It has also been extended to cover small business, and requires significantly more information to be provided to prospective guarantors.

In addition the New Code establishes an independent body, the Code Compliance Monitoring Committee to monitor banks’ compliance with the Code, and investigate and make determinations on any complaints from any person in breach of the New Code.