In evidence before the Senate Select Committee on Lending to Primary Production Customers on 11 August 2017, the Chief Executive of the Australian Bankers Association, Anna Bligh, said that the Code of Banking Practice is currently being re-written.
“The industry has taken the view that the code should be approved by ASIC. If so, it will be the first time that ASIC has actually approved an industry code of practice”.
She said that the ABA is “very hopeful that the code will be finalised and approved by ASIC by the end of the year, but that approval might take a bit longer”.
In response to a question from Senator Smith to what extent the interests of farming or agricultural businesses would be accommodated in the Code, Ms Bligh explained that
“There are a number of new provisions proposed for the code that will go directly to small businesses, including farms and agribusiness. It will pick up, for example, the recommendations of the Carnell inquiry in relation to contracts. The code will pick up and include the recommendations from the Coorey report that the industry initiated which goes to a broad range of issues that affect every customer. Some of the specific things that will particularly interest farmers and agribusiness will be the appointment and regulation of valuers, receivers and insolvency practitioners in relation to matters that might arise”.
Ms Pullinger of the ABA then explained that
“the third parties that banks work with—we’ve heard a little bit about valuers and insolvency profession. We are developing some industry guidelines which take into account the recommendations that the Small Business and Family Enterprise Ombudsman made in her report and also some of the recommendations that were in the Code of Banking Practice. Those guidelines are in development at the moment. They do speak to a number of the issues that have come up here about improved communication, provision of documentation, earlier engagement with customers on these matters and issues like that. We are also consulting quite closely with Kate Carnell’s office on them; we are speaking to the regulator; and we have spoken to the National Farmers Federation and AgForce and groups like that”.
This Committee was established on 16 February 2017 to inquire and report on the regulation and practices of financial institutions in relation to primary production industries, including agriculture, fisheries and forestry. The committee is to report by 18 October 2017.