The self-regulatory code of banking practice provides a customer Charter on the standards of best banking practice. The CDP was prepared by the Australian bankers Association and commenced in 2003 and revised in 2004. The code is voluntary and does not have the force of law. It is monitored by the Australian Securities and Investments Commission and the code compliance monitoring committee. Once the bank adopts the code, it becomes part of the terms of the bank’s contract with its customer. The code is used by the banking and financial services ombudsman is a test of banking industry practice, that has been approved by the Australian Securities and Investments Commission under its power to approve codes of conduct in the financial services sector which establishes best practice under the Corporations Act 2001 (Cth).
The code sets out the banking industry’s main commitments obligations to customers on standards of practice, disclosure and principles of conduct for their banking services but does not cover all the issues of good banking practice. The code prescribes what is good practice. Small business is defined as a business having less than 20 people full-time. The code is not limited to employees, and people includes related person such as contractors, consultants and sales representatives. Banking practice is wider than only banking because the code applies to any financial service or product under clause 40 of the code. The basic structure of the code document is an introduction which states that the code is voluntary and defines a financial product in a financial service. The code then moves on to the key commitments of members to achieve best practice and continuously work towards better disclosure, acting fairly reasonably and complying with the law. The code also covers resolution of disputes, monitoring and sanctions. The banking and financial services ombudsman provides a free, independent, alternative dispute resolution scheme for financial institution customers and, as from 1998, all small business having unresolved disputes involving up to $ 280,000.
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David Coleman is a lawyer in Sydney Australia with over 10 years experience in the legal industry. If you need legal advice or a access to a legal document click on the links contained here.