Thousands of additional businesses will be protected under an updated banking rule book, which will increase the borrowing limit to qualify as a small business from $3 million to $5 million.
ASIC chair Joe Longo said more small businesses would be able to access the banking code’s protections.In an address to the Australian Banking Association conference in Melbourne on Thursday, ASIC chair Joe Longo said the code needed to be responsive to community need based on circumstances at the time, citing cost-of-living pressures as a recent example.
Small business customers receive specific protections including simplified loan documentation and limits on enforcement action.The changes to the code come after a series of reviews and consultation on the current code, which came into play in 2019 following the Royal Commission into the banking sector. The code is not legislated, and is not enforced by ASIC, but is agreed on by members of the ABA.