Customer trust and confidence in banks are essential to the industry’s ongoing success. For the last 25 years the Code of Banking Practice and the Banking Ombudsman have played a crucial role in improving customer outcomes by setting minimum industry standards and resolving customer issues. They have both helped build trust and confidence. Here’s to another 25 years of better banking.
The New Zealand Bankers’ Association has struck a surprisingly aggressive tone in its initial submission on the Reserve Bank’s review of banks’ capital adequacy requirements.
Finance and Expenditure Select Committee
New tax law that comes into force on 1 July will require banks to provide Inland Revenue with tax information for certain customers.
The new law, aimed at reducing global tax evasion, means that banks and other financial institutions will need to identify accounts held by foreign tax residents. They will then have to report information about those customers to Inland Revenue, which will in turn share that information with other countries’ tax agencies that are party to the information sharing agreement.
The tax information sharing scheme is reciprocal, and other countries will report to Inland Revenue on New Zealand tax residents in their jurisdictions.
“The policy behind this legal requirement is designed to combat tax evasion around the world. The banking industry supports that goal,” says New Zealand Bankers’ Association chief executive Karen Scott-Howman.
“It means that banks may ask existing customers to confirm if they are tax residents in countries other than New Zealand. It also means that banks will ask new customers after 1 July to self-certify their country or countries of tax residence.”
Under the law, customers identified as foreign tax residents will need to provide banks with their date of birth and foreign taxpayer identification number.
The so-called ‘Automatic Exchange of Information’ (AEOI) adopts the Common Reporting Standard (CRS) to share information among participating countries.
At this stage Inland Revenue will be sharing information with 58 other jurisdictions. The information must be reported to Inland Revenue by 30 June every year, with the first exchange of information taking place in 2018.
A factsheet for customers who hold or control accounts at banks and other financial institutions is available from Inland Revenue at:
More information about AEOI is available at:
http://www.ird.govt.nz/campaigns/2017/aeoi.html
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Ministry of Business, Innovation and Employment
According to NZBA the existing Code is prescriptive and largely duplicates bank terms and conditions.
The New Zealand Bankers’ Association is encouraging people to look for the signs of financial elder abuse as part of Elder Abuse Awareness Week.
“Financial elder abuse is the illegal or improper use of older people’s money, property and other assets. This kind of abuse is a very real risk for older New Zealanders. It’s particularly nasty because it involves people, often loved ones, taking advantage of people’s trust and vulnerability,” says New Zealand Bankers’ Association chief executive Karen Scott-Howman.
Around half of reported elder abuse cases involve financial abuse.
“It’s important for all of us to be aware of the risks to older people, to know what to look for, and where to get help. Often older people are exploited by family and others they have close relationships with. They may also fall victim to scams by con artists.”
Common examples of financial elder abuse include:
- Unauthorised taking of money or possessions
- Misuse of powers of attorney
- Failure to repay loans
- Use of home and assets without permission or contributing to costs
- Scams that rely on establishing a relationship with an older person with the intention of exploiting their savings, assets or personal information.
The Bankers’ Association has published guidelines to help banks meet the needs of older and disabled customers. They include encouraging banks to provide training to staff on how to recognise signs of potential financial abuse while being sensitive to customers’ situations and wishes. Banks must strike a balance between being vigilant and following instructions from customers about what they want to do with their money.
Age Concern’s Elder Abuse and Neglect Prevention Service can provide assistance and advice in cases of elder abuse. Contact details are available at: https://www.ageconcern.org.nz/Public/Info/Services/Elder_abuse_and_neglet/Where_to_get_help.aspx
World Elder Abuse Awareness Week runs from 15 to 22 June. “Elder abuse hits close to home” is the theme for this year.
More information about Elder Abuse Awareness Week is available at:
http://www.superseniors.msd.govt.nz/health-wellbeing/preventing-elder-abuse/weaad-2017.html
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The New Zealand Bankers’ Association today called for public submissions on its review of the Code of Banking Practice.
“We’re proposing a new-look, principles-based Code,” says New Zealand Bankers’ Association chief executive Karen Scott-Howman.
“The current Code is quite prescriptive, and has largely come to duplicate bank terms and conditions. A principles-based approach is meant to make the Code more accessible to bank customers and avoid duplicating customer contracts. It will also provide the Banking Ombudsman with more flexibility in determining what good banking practice is.”
“This approach will help keep the Code up to date in the context of changes to the way we’re banking, and new obligations for banks under consumer law and regulations.
“In drafting the new Code we have drawn out the good banking practice principles underlying the current Code and set out what banks will do to give their customers a positive banking experience.”
The five principles set out in the draft Code are that banks will:
- Treat customers fairly and reasonably
- Communicate with customers clearly and effectively
- Respect customers’ privacy and confidentiality and keep their banking systems as secure as they can
- Act responsibly when offering or providing customers with credit
- Deal effectively with customer concerns and complaints.
“This fresh approach to the Code aims to support positive relationships between banks and their customers in a way that everyone can understand,” says Scott-Howman.
NZBA welcomes public submissions on the proposed Code until 26 July. Information on the submission process is available at:
The draft Code of Banking Practice is available at:
Further information about the draft Code of Banking Practice is available in these FAQs at:
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Given the number of factors involved, it’s not surprising there would be difference in retail interest rates in different countries.
Reserve Bank of New Zealand