Bank code review supports ASBFEO recommendations

AN INDEPENDENT review of the banking code of conduct has reinforced the findings of Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell’s recent bank inquiry report, which highlighted the need for a code with ‘teeth’, including greater emphasis on small business lending.

The independent review conducted by Phil Khoury, into the Australian Bankers’ Association’s (ABA) Code of Banking Practice, gathered feedback from the sector – including from the ASBFEO – and recommended a variety of changes to ensure greater coverage in the Code for small business customers.

“As a result of our inquiry into small business lending, we are of the view that the Code in its current state, does not provide an adequate framework for the cultivation of a balanced relationship between banks and their small business customers,” Ms Carnell said.

“In our report, released earlier this year, we recommended the Code be revised to include a dedicated section on small businesses; that the revised Code be administered by ASIC; and that it be written in plain English.

“Consistent with our report, Mr Khoury’s review has reinforced these recommendations, along with our proposal to change the definition of small business loans to include facilities worth under $5 million.

“These recommendations – if implemented – will go a long way in addressing the issues highlighted in our report, particularly in relation to access to justice, non-monetary defaults, improved standard form contracts, and more reasonable notice periods.

“The ABA’s current advertising campaign promises to make “banking better” however the proof is in the pudding; it’s now up to the ABA – and the individual banks – to take the recommendations of this review – and of the ASBFEO report – and start putting them into practice.

“Until we see the banks implementing meaningful changes to the way they interact with small business customers, “making banking better” will only ever amount to a catchy marketing slogan,” Ms Carnell said.

www.asbfeo.gov.au

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