ASIC has approved a new version of the Australian Banking Association’s (ABA) Banking Code of Practice, which includes enhancements to key protections. The new Code will commence on 28 February 2025.

Following a period of extensive ASIC-led consultation, the ABA agreed to address critical gaps flagged by stakeholders, resulting in a strengthening of standards and a retention of key protections for consumers and small businesses.

The enhancements in the February 2025 Code include:

expanding the definition of a small business from $3 million in aggregate borrowings to $5 million meaning another 10,000 businesses will be eligible,
improved inclusivity and accessibility for customers, including via interpreter services,
new provisions for deceased estates,
broadening the definition of financial difficulty, and
enhanced protections for loan guarantors.
ASIC sought to ensure there was no diminishment of key Code protections, including the requirement to act with the care and skill of a diligent and prudent banker for consumer borrowers and their guarantors.

Important provisions regarding the handling of consumer complaints and ensuring the robust oversight of the Code by the Banking Code Compliance Committee have also been retained, including by a new provision that commits subscribing banks to be bound by their obligations under the Banking Code Compliance Committee Charter.

ASIC Chair Joe Longo said while there are several key improvements in the new Code, it was not the final word in customer-focussed banking.

‘Banks have a significant impact on our lives and Australians and ASIC rightly have high expectations of them,’ Mr Longo said.

‘ASIC’s review has been focused on ensuring this Code can make a difference in the day-to- day practice of the banking sector and through that, good customer outcomes.’

In coming weeks, ASIC will also release reports on Better Banking for Indigenous Australians, credit card offerings, and scam detection, prevention and response.

‘The Code and reports like these are a call for banks to continuously look at how they should be putting the customer front and centre. ASIC expects the ABA to continue working with its members to consider opportunities to improve consumer outcomes through data insights, including the identification of consumers experiencing vulnerability and customers identifying as First Nations consumers.

‘We look forward to following the implementation of the Code and seeing its subscribers hold themselves to high standards of implementation and compliance,’ Chair Longo said.

ASIC’s decision to approve the new Banking Code of Practice follows an independent review of the code in 2021, public consultation by ASIC on a revised code from November 2023 to January 2024 and engagement with the ABA, consumer groups and other interested stakeholders.

The February 2025 Banking Code of Practice will shortly be made available on the ABA’s website.

The new Code will commence from 28 February 2025.