The Australian Banking Association (ABA) has released its updated ethics and conduct rule book for Australia’s banking sector, with new provisions that expand protections for small businesses, vulnerable customers and loan guarantors.

The new Banking Code of Practice, approved by the Australian Securities and Investments Commission (ASIC) last June, was revised by the ABA with “extensive consultation with stakeholders, consumer advocates, small business representatives and regulators”, it says.

At its centre of the 2025 Code is an expanded definition for small businesses, bringing into the fold businesses with $5 million in aggregate borrowings (up from the existing upper threshold of $3 million in aggregate borrowings).

The ABA notes that, as a result of the change, an additional 10,000 small businesses across the country will come under the protections of the Code.

The new Code will also update the conduct standard to align with the Corporations Act, obligating banks to operate “efficiently, honestly and fairly”. Previously, this standard required banks to “engage with [customers] in a fair, reasonable and ethical manner”, which may have conflicted with ASIC’s existing remit as an enforceable provision.

Protections covering vulnerable individuals and communities have also been extended in the new Code, with the list of examples of vulnerable circumstances now including disability, literacy and language barriers, cultural background, Aboriginal and Torres Strait Islander customers, customers in remote locations, and incarcerated persons.

Among the updated provisions include:

• new obligations for banks to meet with customers intending to act as guarantor;
• a new definition for vulnerable customers; bank staff will also need to undergo training to help recognise if a person may qualify for a basic, low or no fee account.
• new provisions for managing deceased estates;
• a new commitment to organise or refer customers to free support services such as interpreters, AUSLAN and National Relay Services;
• greater clarity on the types of support available to all customers, including financial difficulty options for small businesses; and
• an updated section on inclusive and accessible banking, including a recognition that banking services should be inclusive of people with diverse sexual orientations.

ABA chief executive Anna Bligh said the new Code “strikes the right balance between creating new protections and simplifying parts to ensure it is easier to understand and apply – not only for bank staff, but for customers and their representatives too.”

“This new rule book is about ensuring that when customers interact with their bank, they are getting the highest level of service and care,” Bligh said.

“It sets new standards and clearer expectations for service, integrity and accountability across the entire banking industry.

“There is now greater clarity on how banks will support customers facing financial difficulty, including arrangements that can be put in place to help them get back on their feet.”

Luke Achterstraat, head of the small business lobby group COSBOA, welcomed the extended protections for small businesses.

“Strong, harmonious and trusting relationships between financial institutions and small businesses is particularly important in a challenging environment,” he said.

“Small businesses are time-poor, are experiencing economic fatigue so these enhanced protections could not come sooner.”

The new 2025 Code took effect on 28 February 2025.