Temporary changes to banking code due to COVID-19

The temporary changes, approved by ASIC, acknowledge that during the pandemic and its aftermath, banks are dealing with very high volumes of customers in distressed circumstances and operating in very uncertain economic conditions. Many customer solutions offered as part of the banks’ COVID-19 assistance are tailored, and require banks to ensure the right support to suit customer circumstances.

The two changes provide that in certain circumstances banks may not always be able to meet the timelines for customer communication outlined in some provisions of the Banking Code of Practice; and that a bank’s obligations when lending to small business customers will be informed by the circumstances and effects of COVID-19 generally.

According to the ABA, the temporary changes will help continue the flow of credit to small and family businesses during current economic challenges.

They also reflect that, in some limited circumstances, banks may not be able to comply with usual timing requirements specified in the code. The ABA stressed that this change only applies to certain paragraphs, noting that non-compliance with the specified times will not constitute a breach of the code if banks are making good faith efforts to comply.

All other parts of the code, including time limits specified in paragraphs other than those listed above, continue to apply as usual.

The code can be found here.