The interim authorisation allows member banks to agree not to charge default interest on loans secured under agricultural land if a drought or natural disaster is declared in the area.
ACCC chair Rod Sims believes it’s an important first step towards the banking sector aligning with the Hayne royal commission.
“We’re allowing the banks to start making important changes following the Hayne royal commission, and for them to start taking steps to ensure they are prepared ahead of a new banking code coming into effect next year,” said Mr Sims.
It also allows member banks to agree not to charge dishonour fees or overdrawn fees or allow informal overdrafts on basic bank accounts.
Interim authorisation removes the risk that the ABA and its member banks would breach competition laws by agreeing to make and implement these changes to the banking code.
Interim authorisation commences immediately and remains in place unless it is revoked by the ACCC or when the ACCC completes its assessment of the application for authorisation.
The ACCC will consider any submissions and possible changes the ABA proposes in response to these issues before deciding whether to grant interim authorisation for the basic banking proposals.
The ACCC expects to issue a draft determination on the ABA’s authorisation application in September of this year.