In Australia, the banking system is well-developed and very complex. This is a short summary of some aspects of the law relevant to consumers.
Banks, credit unions and other financial institutions are authorised to carry on business as deposit-takers under section 9 of the Banking Act 1959 (Cth). Authorised deposit taking institutions are known as ADIs throughout the legislation.
Banks act as deposit takers (savings or transaction accounts) or as lenders providing services to either individual consumers or businesses. Banks also may offer ancillary services such as safe deposit for valuable items, and may also act as brokers for insurance or financial planning.
Credit unions, mutual banks and building societies are owned by their members, and are not run for profit. Publicly listed banks are owned by shareholders and run for profit.
Consumers borrowing money from lenders including banks are covered by the provisions of the National Consumer Credit Protection Act 2009 (Cth) (the NCCPA) and the National Credit Code, which is Schedule 2 to the NCCPA.
Most but not all Australian banks are subscribers to the Code of Banking Practice. Credit unions, building societies and mutual banks may subscribe to the Customer Owned Code of Banking Practice. Both Codes of Practice set standards of good industry practice in relation to their customers.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.