PROBLEMATIC BANKING PRACTICES
This paper provides an insight into nine years of problematic banking practices and will be published chapter-by-chapter over coming months.
It examines the extent to which customers of major banks are not provided fair treatment and full disclosure of facts by banks relevant to banking practices and customer protection.
Before 1981, activities of major Australian banks, including the manner they dealt with customers, were subject to detailed regulations imposed by the Federal Government.
Following the 1981 Campbell Committee Report, banking regulations were significantly reduced.
After the stock market crash in 1987, it was feared deregulation had gone too far. An alternative approach was sought to ensure customers received fair treatment, and the Government assigned responsibility for making suitable recommendations to a committee chaired by Stephen Martin.
In its 1991 Report, the Martin Committee concluded the banks should be required to establish a formal system of self-regulation based on a government approved Code of Banking Practice.
The Report cited the high cost of resolving disputes in the courts between banks and customers as problematic, and stressed the importance of effective, low cost, complaints resolution procedures.