Your rights under the Code
The Banking Code of Practice provides key protections for small business and farming customers not found elsewhere under the law.
Under the Code, banks make an overarching promise to be fair, reasonable and ethical to all customers. The Code also includes specific protections that can assist small business and farming customers when they apply for a loan, have difficulty making repayments or in their day to day banking.
Under the Code, a small business is one with:
- less than $10 million in annual turnover the previous financial year
- fewer than 100 full-time equivalent employees, and
- less than $3 million total debt to all credit providers.
When you apply for a loan
- Banks must tell you how to apply for a business loan, what information you need to provide, and how long a decision will take. (Chapter 20)
- Before you accept a loan offer, your bank must give you a copy of the loan terms and conditions in plain English. (Chapter 20)
- If a bank declines your loan application, it must tell you why. (Chapter 20)
When you borrow money
- Banks must exercise care and lend responsibly. Before offering to lend you money, a bank must consider your circumstances and make sure your business can repay the new or varied loan. (Chapter 17)
When your business is in financial difficulty
- If you’re having trouble meeting your repayment obligations, your bank must try to help you to overcome your financial difficulty. (Chapter 39)
When you default on a loan
- If you default on a loan, generally, your bank must give you 30 days notice before it starts enforcement action or requires you to repay the full debt. (Chapter 21)
When you enter farm debt mediation
- Before you begin farm debt mediation, your bank must tell you that you have a right to instead make a complaint to the Australian Financial Complaints Authority (AFCA). (Chapter 47)
- If you begin farm debt mediation but can’t reach agreement, you still have the right to make a complaint to AFCA. (Chapter 47)
When a bank uses external property valuers, investigative accountants or insolvency practitioners
- When appointing external property valuers, investigative accountants and insolvency practitioners, banks must make sure these external suppliers are qualified and members of the appropriate professional bodies and codes of conduct. (Chapter 24)
- When appointing receivers who have been investigating accountants for a small business, banks must ethically manage any potentenial conflicts of interest. (Chapter 24)