5. credit

This is an old version of the Code of Banking Practice. View the current Code

5.1 Provision of Credit
5.2 Guarantors and Providers of Other Security

 5.1 Provision of Credit

1. When you seek Credit from us, we will provide you with information about the various types of Credit Facilities available to you, so that you can make an informed decision.
2. When considering your application for Credit we may take into account your financial history, including information from Credit Reference Agencies. We will obtain your consent before accessing information about you from third parties.
3. We will only provide Credit to you or increase your Credit limit when the information available to us leads us to believe you will be able to meet the terms of the Credit Facility. We have the right to decide not to provide Credit to you.
4. When a Credit Facility is approved by us, we will comply with all laws that may apply. we will inform you, and any party providing Security, of your obligations including:
   1. the annual interest rate and whether it may be changed during the period of the Credit Facility;
   2. all fees and charges (including government charges and taxes);
   3. the period for which the Credit Facility is available;
   4. the repayment terms, including any terms relating to early repayment costs;
   5. any information you need to supply to us during the term of the Credit Facility; and
   6. any other important information such as any insurance and Security requirements, when penalty or default interest is charged or conditions you will need to meet before the Credit Facility is made available to you.
5. If you have a Credit Facility in conjunction with others, your liability is Joint and Several, unless we agree otherwise.
6. If you do not comply with the terms of your Credit Facility, we will contact you at your last known address to advise what steps we may take. If this happens, we may disclose information about your contact details and debts to Credit Reference Agencies and/or we may ask an outside party to collect your debt on our behalf. We will give you notice that we are going to do this, explain why we are disclosing the information and the effect it may have on your ability to obtain Credit in the future. If it is later agreed that the information supplied was not correct, we will make sure the Credit Reference Agencies are told of this.
7. It may be that we have written your debt off for our internal accounting processes, however this does not mean that you are no longer liable for your debt.
8. A record of your prior debt may remain on the records of the Credit Reference Agency and/or Debt Collection Agency even after you have paid off your debt to us, but for no longer than the permitted period allowed by law.
9. We will promptly inform you if we use funds you have deposited with us to offset your debts with us.
10. The following principles will also be applied by us:
    1. we will co-operate with your advisers to explain the nature of any Credit Facility and to clarify anything during the relationship;
    2. we will agree with you at the outset of the Credit Facility what sort of monitoring information you should supply and how frequently. If circumstances change, any new monitoring information required will be advised to you in writing;
    3. we will communicate with you when we have concerns about your business and/or our relationship with you, explaining the reasons for our concern;
    4. if you find yourself in financial difficulty, please contact us immediately so we can consider your particular situation and any recovery proposition. You should contact us before you Default under any Credit Facility or as soon as possible thereafter as the sooner you contact us, the better position we will be in to assist you;
    5. we may ask for additional financial information and/or seek an independent review. If we do so, we will explain our requirements and that there may be costs attached;
    6. where we have requested that you obtain an independent review of your business, where possible we will seek to discuss the information provided with you (and, should you request, your advisers) before taking any action; and
    7. if you act in good faith, keep us informed about developments, keep your agreements with us, heed what your own and any independent advisers say and are prepared to make the changes needed early enough to preserve the underlying business, we will not normally seek the immediate appointment of a receiver or start other recovery proceedings.

 5.2 Guarantors and Providers of Other Security

1. We will make sure that people who have offered to give us a Guarantee or other Security are made aware of their obligations and informed that:
   1. by giving a Guarantee or providing Security for your debt, they may become liable instead of, or as well as, you;
   2. they should seek independent legal or, if required, other professional advice before giving any Guarantee;
   3. they may request, and we may, but are not required to, agree that the amount of their liability under the Guarantee or Security will be limited;
   4. unless we have agreed that the amount of the Guarantee or Security is limited, and what the limit of their liability will be, their Guarantee or Security will be unlimited; and
   5. we may also claim any interest owed and any costs incurred in any recovery process.
2. There are circumstances where a Guarantee will remain in force after the guaranteed debt is repaid. You should discuss this with your independent legal or professional advisor.
3. Guarantors and people giving Security may use the complaints procedures set out in clause 1.3 of this Code.