Banks will have to tell customers when interest rates on their savings and transaction accounts change, be upfront about their deposit products and simplify paperwork so borrowers can switch to cheaper competitors under changes to be put in place across the sector.
Chalmers said the changes were all about giving the nation’s bank customers more information so they could make decisions in their financial interest. Under the changes, it will be mandatory for banks to tell customers when interest rates change on their transaction and savings accounts. Disclosure requirements on basic deposit accounts will be simplified to make them more understandable.
Financial product comparison websites will have to disclose how they rank products, as well as any financial relationships they have with particular banks or financial institutions. Research released last year by the Reserve Bank showed relatively low levels of financial literacy, with many Australians struggling with concepts such as the movement of interest rates, the bank’s inflation target and how the economy operates.While the changes are aimed at ordinary banking customers, the government is also launching a review into ways of encouraging small and medium-sized banks to be more competitive against the established four major institutions.
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Source: FinancialReview - 🏆 2. / 90 Read more »