Australia’s Banking Sector Faces Tough New Regulations in 2020
In response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the Australian Government has announced a series of new regulations aimed at improving transparency and accountability within the country’s banking sector. The exposure draft legislation and regulations were released for public consultation on December 14, 2020.
Proposed Reforms
The proposed reforms are designed to address concerns over misconduct and poor customer service in the banking industry. Key measures include:
- Stricter standards for lending: Banks will be required to demonstrate greater transparency and accountability in their dealings with customers.
- Responsible business conduct: Enhanced powers for regulators to hold banks accountable for their actions.
- Improved access to justice: Consumers who have been affected by bank misconduct will have easier access to justice.
Key Changes
Under the new regulations, banks will be required to:
- Demonstrate greater transparency and accountability in their dealings with customers
- Provide more detailed reporting on loan approvals and interest rates
- Improve access to justice for consumers who have been affected by bank misconduct
Public Consultation
The Australian Treasury has released a series of exposure drafts outlining the proposed changes, which are open for public consultation until January 25, 2021. The Department is seeking feedback from stakeholders on the draft legislation and regulations before they are finalised.
Background
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry identified widespread misconduct among major banks, including fraudulent practices and poor customer service. The Australian Government has promised to take decisive action to address these issues and restore trust in the banking system.
Next Steps
It is expected that the finalised regulations will come into effect in 2021, following a thorough review of submissions received during the consultation period.