Australian Banking Association Code of Practice — Your Rights as a Borrower (2026)

Updated

Australian Banking Association Code of Practice — Your Rights as a Borrower (2026)

The Banking Code of Practice is a voluntary industry code adopted by member banks of the Australian Banking Association (ABA). All major Australian banks and most authorised deposit-taking institutions (ADIs) are signatories. The Code sets standards for how banks must treat their customers — standards that go beyond the minimum legal requirements.

Who the Code Applies To

ABA member banks that are signatories to the Code include the Big Four (CommBank, ANZ, Westpac, NAB) and most other Australian banks. Credit unions and mutual banks may have their own equivalent codes.

To check if your bank is a signatory: see the ABA website (aba.org.au).

Key Rights Under the Banking Code of Practice

1. Clear and Transparent Communication

Signatory banks commit to:

  • Providing information in plain language
  • Explaining fees, interest rates, and conditions clearly
  • Not using misleading or deceptive statements
  • Giving you enough information to make informed decisions

What this means for mortgage borrowers: Your bank must explain loan features (offset, redraw, fixed rate implications) in clear terms and disclose all fees applicable to the loan.

2. Responsible Lending and Suitability

Banks must take reasonable steps to ensure products are suitable for customers’ circumstances. For home loans, this means:

  • Assessing your ability to repay
  • Not providing a loan that creates significant hardship
  • Assessing on current financial circumstances, not assumed future income

This is reinforced by (and in some respects is parallel to) the statutory responsible lending obligations under the NCCP.

3. Financial Difficulty and Hardship

The Code includes specific provisions for customers experiencing financial difficulty:

  • Banks must have a financial hardship team available
  • When you notify the bank of financial difficulty, they must respond promptly (within 21 days under the Code)
  • Banks must consider appropriate options including repayment deferrals, restructuring, or waiving fees
  • Banks must not commence enforcement action (such as repossession) while a hardship application is being genuinely assessed

Key right: You have the right to request hardship assistance. The bank cannot simply refuse without proper consideration.

4. Privacy and Data Handling

Banks must handle your financial information in accordance with the Privacy Act 1988 and the Australian Privacy Principles. This includes:

  • Not sharing your information without consent (with limited exceptions)
  • Providing access to your own records on request
  • Correcting inaccurate records

5. Credit File Reporting

Banks must ensure that information they report to credit bureaus is accurate. If incorrect information is reported:

  • You can request correction through the bank
  • If not corrected, you can escalate to AFCA (which can order credit file corrections)
  • You can also request the credit bureau to investigate

6. Fees and Charges

Banks must:

  • Not charge fees not disclosed in the product documentation
  • Notify you of fee increases before they take effect
  • Consider fee waivers for genuine hardship

Enforcing the Code — What You Can Do

The Banking Code of Practice is enforced through two mechanisms:

1. AFCA: If a bank breaches the Code in a way that affects you individually, you can complain to AFCA. AFCA can make determinations based on Code breaches as well as legal breaches.

2. Banking Code Compliance Committee (BCCC): The BCCC monitors overall Code compliance and can investigate and publish findings on breaches. Individuals cannot take direct BCCC action — it is an industry oversight body.

3. ASIC: Significant or systemic Code breaches may also constitute legal breaches under the NCCP or Australian Consumer Law — reportable to ASIC.

Frequently Asked Questions

Is the Banking Code of Practice law?

No — it is a voluntary industry code. However, signatory banks have contracted to comply with it, and breaches can be found by AFCA and the BCCC. Significant Code breaches may also constitute breaches of Australian Consumer Law (which is law).

What if my bank isn’t a Code signatory?

Non-signatories are not bound by the Code. However, statutory obligations under the NCCP, Australian Consumer Law, and the National Credit Code still apply to all licensed credit providers regardless of ABA membership.

The bank is threatening to repossess my home. Does the Code protect me?

Yes — under the Code, banks must not commence enforcement action while a hardship application is being genuinely assessed. If you have formally applied for hardship assistance, request that repossession proceedings be paused while it is considered. Escalate to AFCA immediately if the bank refuses.

This article provides general information about the Australian Banking Association Code of Practice. The Code is updated periodically — check the current version at aba.org.au. For specific advice about a dispute with your bank, contact AFCA at afca.org.au or find resources through MoneySmart.