Bank Customers To Benefit From New Charter

The move to formally improve the relationship between banks and their business customers is being welcomed by Consumer
Affairs Minister Peter McCardle.

After discussions between Mr McCardle and the Bankers' Association over the past three months, a Statement of Principles
has been developed to guide that relationship. Consisting of 13 principles, the Statement formally states what customers can
expect from their bank, and vice versa. It comes into effect on 1 June 1999.

"The aim is to minimise any perceived unfairness. Both banks and borrowers, especially businesses, will have greater
clarity about their responsibilities to each other. And customers will have better opportunities to seek redress if they think
their bank is not adhering to the Principles," Mr McCardle said.

"In future any business getting into financial difficulties should be given warning of a bank's concerns, and get the chance to
take remedial action. Equally, those customers will be expected to approach their bank if they are getting into trouble. So the
new guidelines are in everyone's best interest.

"The Principles are based on similar sets of principles in the UK.

"If a business customer acts diligently and in good faith, the Statement of Principles will see them being treated fairly by the
bank, which would have an obligation to work with them to examine viable rescue operations," Mr McCardle said.

Specifically, the Statement of Principles will require banks to:

- tell customers in writing of any concerns about a business, giving reasons

- make it clear what the business customer needs to do to avoid recovery action

- support attempts to rescue a business

- inform business customers in writing of the terms of the facilities they provide, for example borrowing, and any changes to
these terms

- apply the Code of Banking Practice to business customers

The principles are to be reviewed in two years' time, when comments will be sought from the public.