THE CODE
Hold Us
Accountable
The revised Code of Banking Practice is in effect. The Code represents a firm
commitment by banking institutions to clients and to the country as a whole.
C
onsumer protection is an essential element of the
dynamic and challenging business environment
in which the banking sector operates. A critical
tool through which banks fulfil their obligations
to customers is the Code of Banking Practice,
which sets out the aspirational commitments banks make to their
customers, and provides information on the respective rights and
obligations of both parties.
The previous Code of Banking Practice was in effect from 2004.
Last year the Banking Association of South Africa completed a
significant review of the Code to account for changes in regulation
and to respond to recommendations made by the 2008 Competition
Commission’s Banking Enquiry – the Jali Banking Enquiry.
This review involved a long and rigorous consultation process
with member banks and stakeholders. The revised Code has specific
provisions to respond to the Jali Banking Enquiry with regards to
certain banking matters, the Consumer Protection Act of 2008 (CPA)
and the National Credit Act of 2005 (NCA). The revised Code of
Banking Practice became effective from 1 January 2012. ‘The Code
provides the platform within which the Ombudsman for Banking
Services adjudicates disputes between banks and their customers,’
says Cas Coovadia, managing director of The Banking Association.
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SA BANKER
Edition 1
‘It supplements the regulatory and contractual requirements that
govern relationships between banks and these customers, committing
the banks to do that little bit more in providing good service.
‘Consumer education and information are becoming integral to
sustainable banking business and the revised Code enables banks to
provide these in an effective manner,’ Coovadia adds.
‘An essential element of consumer education and information is
to enable consumers to understand how complex pieces of legislation affect them. An example of this is the Consumer Protection
Act, which requires promotional material from banks to be clear,
fair, reasonable and not misleading and also allows customers to
opt out of a transaction under certain circumstances, as well as
telling them their obligations if they choose not to opt out. The
revised Code explains rights and obligations like these in a simple
way,’ says Coovadia.
The Code also includes the following, in response to relevant
recommendations of the Jali Banking Enquiry:
• Standardised terminology for transaction services;
• More information on debit orders, including the use of debit
orders, types of debit orders, stopping debit orders and disputing
debit orders; and
• Switching of transaction bank accounts.
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