(Reuters) - Australia’s consumer regulator said on Friday it planned to strengthen banking code amendment proposals given by a banking sector body, as it sought to adopt suggestions from an inquiry into misconduct in the country’s financial sector.
The Australian Competition & Consumer Commission (ACCC) said additional conditions need to be added to amendments proposed by the Australian Banking Association (ABA) to protect low-income consumers and drought affected farmers.
The ABA, which represents 23 banks, including Australia’s ‘Big Four’ and units of several top foreign banks, proposed that certain basic bank accounts have no minimum deposits, free debit cards and facilities and free unlimited domestic transactions.
“While the ACCC strongly supports these objectives, we are proposing to place extra conditions on ABA members to ensure the changes effectively address the Royal Commission’s recommendations, and in turn actually deliver these public benefits,” ACCC Deputy Chair Delia Rickard said.
Last year, a Royal Commission inquiry uncovered widespread misconduct at the expense of consumers in the Australia’s financial sector, and in a report this year set out a series of recommendations to improve protections and oversight.
The ACCC said that one of its concerns was that under ABA’s proposed changes, banks would not be required to tell customers if they were eligible for those types of basic bank accounts.
Under ABA’s changes, default interest charged on agricultural loans in drought-affected areas would be prevented.
“We note the ACCC has raised three further conditions which the ABA will consider in more detail following discussions with members,” the ABA said in an emailed statement.
Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Rashmi Aich