Terms of Reference

The Code of Banking Practice (the Code) is the banking industry’s code of conduct which sets standards of good banking practice for banks to follow when dealing with their individual and small business customers and their guarantors.

The latest version for the Code is known as the Code of Banking Practice (2013).

The Code provides for a review of the Code every five years or earlier if the member banks of the
Australian Bankers’ Association (ABA) request the ABA to do so.

As part of the industry initiatives announced on 21 April 2016, the ABA’s member banks have requested the ABA to commission an independent review of the Code and to complete this review by
31 December 20161.

The ABA commissions this Code review on 7 July 2016.


The banking industry recognises that customers and the wider community expect banks to make sure they have the right culture, the right practices, and the right behaviours.

The Code review will make sure the offer of banking products and services is done in a way that further lifts standards, accessibility and transparency across banking and bolsters the existing strength of the regulatory framework.

Banks are committed to improving their practices and continuing to meet customer needs and community expectations. We want to make sure our Code of Banking Practice is effective in enhancing banks’ capacity to serve consumer interests and to building trust and confidence in banks.

To achieve this, the independent review will:

  • Consider the effectiveness of the Code and identify the relevance and operation of the Code and changes which have occurred in the legal and regulatory environment, including self-regulation, and changes anticipated in banking services
  • Understand and collate views about banking practices to ensure the Code continues to set standards for good banking practices building on banks’ legal obligations and other relevant industry codes, standards and guidelines and reflecting consumer needs and behaviour and community expectations
  • Make recommendations on how the banking industry can strengthen the operation of the Code and promote informed and effective relationships between banks and their individual and small business customers
  • Give attention to the initiatives contained in the industry announcement on 21 April 2016 and other recent initiatives and the extent to which these commitments should be contained in the Code, and
  • Ensure banks and consumers are clear about their rights and responsibilities and that the Code articulates the standards of behaviour expected of banks, including promotion of the Code.


The review will cover all provisions of the Code and any additional matters considered relevant to be included in the Code.

The Code reviewer will give specific attention to assessing and considering:

  1. Purpose and role of the Code in setting the standards for good banking practices and the benefits that the Code provides to banks and their individual and small business customers.
  2. Structure of the Code and clarity in communicating the standards for good banking practices to banks and their individual and small business customers.
  3. The extent to which the Code demonstrates banks’ commitment to putting their individual and small business customers first.
  4. The effectiveness of the key commitments of banks and whether these commitments meet consumer and community expectations to:
    1. Promote better informed decisions about banking services.
    2. Provide information about the rights and obligations of banks and their individual and small business customers in relation to banking services, including raising awareness of the legal and regulatory frameworks governing banks.
    3. Act fairly and reasonably towards individual and small business customers in a consistent and ethical manner.
    4. Comply with all relevant laws and regulations relating to banking services.
    5. Take reasonable measures to provide relevant information and enhance accessibility for people in remote Indigenous communities, older persons and customers with a disability.
    6. Provide hardship assistance to individual and small business customers experiencing financial difficulties.
    7. Resolve complaints and disputes between banks and their individual and small business customers.
    8. Provide appropriate staff training, including on discharging their functions, providing banking services and knowledge of the Code.
    9. Promote the existence of the Code.
  5. The role and mandate of the Code Compliance Monitoring Committee (CCMC), the appropriateness of the differences between the CCMC mandate and clause 36 of the Code, and incentives for compliance by banks with the Code.
  6. The operation of the Branch Closure Protocol, taking into account the recent review and changes made to ensure the effective operation of the Protocol.

In addition, the Code reviewer will have regard to the following:

  1. Definitions, including practical definitions of banking services and small business.
  2. Recognition of the needs of communities in remote, rural and regional areas.
  3. Dealing with the particular needs of agricultural small businesses with respect to banking services.
  4. Direct debits and recurring payments made using a debit or credit card.
  5. Notice provided by banks with regards to any changes with a banking service.
  6. Guarantees provided by a person for the purpose of securing finance or a facility for another individual or small business customer and joint debts.
  7. Laws and regulations covering banking services to individual and small business customers and the extent to which new legal obligations to act in the client’s best interest and responsible lending principles are addressed or require any amendment to the Code.
  8. Treatment of disclosures and communications between banks and their individual and small business customers about products, services, and the costs of these products and services and the evolving technological developments in banking services and electronic communications, including the provision of bank statements to customers.
  9. Sales and distribution and advertising and marketing practices of banks.
  10. The extent the Code covers the practices and qualifications of intermediaries and others banks use in the course of providing banking services.
  11. Commitments to accessibility and financial inclusion, including account suitability and basic bank accounts, financial literacy and the implications of technology developments on banking services.
  12. The desirability for the Code to provide for banks to develop standards for communicating and dealing with vulnerable customers including older persons, customers with a disability and Indigenous customers.
  13. The desirability of the Code to include minimum standards for working with small business customers in financial distress. For example, customer communication; notice period for enforcement actions; on request by the customer, disclosing independent valuation reports of its small business customer obtained by the bank and paid for by their customer; and ethical standards of receivers/ managers (particularly for rural properties with livestock).
  14. The desirability of the Code to set a reasonable compliance timeframe for a small business customer to comply with a bank’s notice of demand and circumstances in which a minimum timeframe should not apply having regard to the provisions of clause 28 of the Code for the bank to work with the customer to try and help their customer overcome its financial difficulties with its credit facility.
  15. The desirability of the Code to include minimum standards for the offer of credit cards, and specifically whether minimum repayment requirements or alternatives should be prescribed.

In addition, the Code reviewer is asked to consider whether the Code ought to comply, and whether it does comply with, ASIC’s Regulatory Guide 183: Approval of financial sector codes of conduct [RG 183]2.

Clause 14.3 of the CCMC mandate requires the CCMC to arrange a periodic review of its activities to coincide with a review of the Code. The Code reviewer is also asked to conduct a review of the activities of the CCMC concurrently with this review. This separate and independent review is given under instructions from the CCMC. More information about this review can be found at http://ccmcreview.crkhoury.com.au/.

Independent Reviewer

The ABA has appointed Mr Phil Khoury, Managing Director, Cameron Ralph Pty Ltd, an independent person with relevant qualifications and experience to conduct this review.

In commissioning this Code review and identifying the Terms of Reference, the ABA has sought the views of the ABA’s Consumer Stakeholder Forum and a number of other stakeholders.


The Code reviewer will conduct the review publicly in consultation with:

  1. consumer and small business organisations
  2. financial services industry representatives
  3. Finance Sector Union and employees of banks
  4. relevant regulatory bodies
  5. member banks, and
  6. other interested stakeholders.


Submissions to the review are invited on any of the matters covered by the Terms of Reference.

The Code reviewer prefers submissions to be provided in Microsoft Word (docx) files or in PDF format. Submissions should be lodged by email to the Code reviewer at this address:
Email: banking.code.review@cameronralph.com.au

Final report

Mr Phil Khoury will assess submissions received on the Terms of Reference and feedback provided and prepare a report. A draft report will be used to facilitate further consultations.

A final report will be published with findings and options about changes to improve the operation and performance of the Code. The findings and options presented by the report will take into account the submissions of all interested parties but will be determined and framed according to the independent judgement of the Code reviewer.

The findings and options will be those of the Code reviewer. The ABA and its member banks will need to consider the report and determine their response and any next steps. The banks are committed to meaningful change that is supported by independent advice and a transparent and public process, and they will have regard to the findings and options identified by the report in determining and implementing appropriate changes to the Code, consistent with their obligations including under the competition law.


The independent review is to be conducted in a timely, transparent and accountable manner. A final report will be published by the end of December 2016.

The implementation of the independent review final report’s recommendations will require assessment by the banking industry and changes to be determined. Commencement and transitional arrangements for the new Code will reflect the nature of the changes made.

The banking industry is committed to ensuring that the time taken in responding to the recommendations, making any changes to the Code, and implementing the changes by banks is completed in as timely a fashion as possible.


The ABA will appoint the Code reviewer. While the banking industry will fund the review, the banking industry will not have any influence over the findings and options identified by the Code reviewer beyond our input as a participant in the review, and the Code reviewer and secretariat will act independently and not in the interests of, or on behalf of, the ABA or its members.

Mr Ian McPhee, the independent expert appointed by the ABA to oversee the progress of the commitments announced by the banking industry, will monitor the process, progress and findings of the review.


It will be assumed that submissions are not confidential. Submissions may be published on the Code review website established for this review at www.cobpreview.cameronralph.com.au and be publicly available.

If a submitter wants their submission, or any part of it, to be treated as “confidential” please indicate this clearly.

The Code reviewer reserves the right to not publish submissions or other material received by the Code reviewer in the course of this review that is offensive, potentially defamatory, or clearly falling outside the scope of the review.


1. http://www.bankers.asn.au/media/media-releases/media-release-2016/banks-act-to-strengthen-community-trust
2.  http://download.asic.gov.au/media/1241015/rg183-published-1-march-2013.pdf