The ACCC has issued a draft determination proposing to grant authorisation to proposed changes to the Banking Code of Practice for a period of five years, subject to a number of conditions.
The Australian Banking Association (ABA) requested authorisation of changes relating to informal overdrafts, dishonour fees, and default interest charged on loans secured by agricultural land. In addition, the ABA seeks authorisation to prescribe certain minimum requirements relating to basic bank accounts. The ABA proposes that these amendments will commence on 1 March 2020. Background.
The conditions include:
- where basic bank accounts are overdrawn without the customer’s agreement banks could not charge interest on overdrawn amounts;
- banks would be required to proactively identify existing customers who would be eligible for the basic bank accounts, including through data analysis, inform these customers of their eligibility, and for the ABA to report to the ACCC on measures taken to offer them fee-free bank accounts, and report how many customers have taken them up;
- members of the ABA who currently offer a basic banking product to continue to do so for the period of authorisation.