Code of Banking Practice

1 CONTENTS
2 INTRODUCTION
3 FUNDAMENTAL PRINCIPLES OF OUR RELATIONSHIP 
4 DISCLOSURE
5 CONDUCT
6 DISPUTE RESOLUTION
7 REVIEW OF THE CODE
8 USEFUL DEFINITIONS

2.

INTRODUCTION

We accept the jurisdiction of the Ombudsman for Banking Services, to mediate, to make binding determinations based on this Code and on the law where appropriate, and to make recommendations in other circumstances including those based on equity. A determination made by the Ombudsman for Banking Services may be made an order of the court. If we refuse to abide by a recommendation of the Ombudsman for Banking Services, the Ombudsman may publish the recommendation and the relevant bank’s refusal to comply.
None of the provisions of this Code:

• will be legally binding in any court of law;
• may be used to influence the interpretation of the legal relationship between you and your bank;
• will give rise to a trade custom or tacit contract or otherwise between you and your bank.
  

Copies of the Code are available from us and from The Banking Association of South Africa. You can also view the Code on the Banking Association’s website at www.banking.org.za. or on your bank’s website. The contact details of the Ombudsman for Banking Services appear on page 20 and you can also obtain more information from the website www.obssa.co.za.

In the text of the Code, "you" means the client and "we", "our" and “us” refer to the client’s bank. There is a section in the back of the Code which contains definitions of certain words and phrases used in the Code. These appear in italics in the text of the Code.

THIS CODE APPLIES FROM: 1 October 2004

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3.

FUNDAMENTAL PRINCIPLES OF OUR RELATIONSHIP

We, the members of the Banking Association of South Africa undertake to:

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We undertake to disclose certain issues to you as our client (or potential client). 

What we undertake to disclose to you

All written terms and conditions will be fair and will clearly set out your rights and responsibilities in respect of a product or service in plain language. We will use legal and technical language only where necessary. Where legal and technical language is used, we will explain what we mean. If you are still uncertain after studying the explanation you may approach us for further clarification.

When you become a client and on reasonable request, we will make available to you:

• clear written information explaining the key features of our services and products in which you express an interest; 
• clear and appropriate information on the different types of products and accounts available from us to assist you to make an informed choice appropriate to your needs;
• recommended safety measures and tips on our services and products in which you express an interest.
• Information on how your account works, including:
• when you can withdraw funds after a deposit has been paid into your account and when funds begin to earn interest;
• the various methods of issuing a cheque;
• stopping a cheque or other types of payment;
• the difference between and the implications of bank guaranteed cheques and bank cheques, where appropriate; 
• the effect of unpaid cheques and other payment instruments on your account including the instances where we may credit your account with the value of a cheque for which we might not have received value ourselves;
• special clearance and the effect(s) it may have on your account;
• how a cheque can become stale and the effect of this;
• how debit orders and stop orders work, the difference between the two and how to stop and/or cancel them;
• information on electronic banking services including the special requirements which we expect of you if you bank electronically;
• the different functions of any card(s) issued to you;
• when your account details may be passed on to credit risk management services;
• any special procedures or safeguards required of you to ensure safer banking. 

• whether fees or charges are negotiable or not; 
• changes to charges for basic banking services, after reasonable prior notice, by two or more of the following methods:
  • letter/statement messages/other personal notice;
  • notices/leaflets in branches;
  • ATM/ electronic banking system messages;
  • media advertisements;
  • Internet Banking;
  • e-mail messages;
  • telephonic announcements (through short message services [sms]); or
  • announcements on our website.
• any additional charges and interest you may have to pay on overdrafts and fixed term products when:
  • your account becomes overdrawn without prior agreement;
  • you exceed your overdraft limit;
  • your loan falls into arrears;
  • you decide to settle a loan early; or
  • you make an early withdrawal or early cancellation.
• the interest charges which apply to your account(s), including:
  • when interest will be deducted from or paid to you;
  • the basis on which interest is calculated;
  • when increases are made to the interest rates which apply to your account(s). We will communicate any increase in the mortgage rate in the public media, as well as directly to you.

• reasonable notice of changes to the terms and conditions of any account, product or service, applicable to you, so that you will have time to decide whether or not you want to continue with the product or service; and
• a copy of the new terms and conditions or a summary of the changes at the last address you provided to us, if we make material changes to them.

• information regarding your rights to access your personal information held by us;
• information regarding what identification and verification documents (which we may verify) we need to prove your identity when you interact or and transact with us. This includes when you first apply to open an account and during our relationship with you, when you obtain a loan or other credit facility or when you conclude other transactions, which is important for your security and may be required by law; 
• information on what checks we may carry out with credit risk management services and other relevant parties;
• reasonable prior notice of our intention to close any of our bank branches, outlets or ATM/electronic banking centres; and
• advertising and promotional material, which is clear, fair, reasonable, not misleading and complies with the appropriate advertising authority guidelines.

We will treat all your information as private and confidential (even when you are no longer a client). Except as set out in 4.7.1 below, we will not disclose any information about your accounts or your personal details to anyone, including other companies in our group, other than in four exceptional cases permitted by law. These are:

• where we are legally compelled to do so;
• where it is in the public interest to disclose;
• where our interests require disclosure (This will not be used as a reason for disclosing information about you or your accounts [including your name and address] to anyone else including other companies in our group for marketing purposes);
• where disclosure is made at your request or with your consent. If you make use of electronic banking facilities like telephone banking, and the telephone calls are recorded, consent to disclosure might be recorded verbally. 

• you have fallen behind with your payments or you are in default with the terms of a product or service, and you have not made satisfactory proposals to us for repayment of your debt following formal demand and you have been given at least 28 calendar days’ notice of our intention to disclose; or
• you have given us written, electronic or in the case of telephone banking, verbal consent; or
• your cheque is referred to drawer, in which case the information may be placed on a cheque verification service.

If the amount owed or the arrears amount is in dispute, we will also disclose this fact, but not the amount involved. 

• a new client, we will obtain your consent at the beginning of your relationship with us;
• an existing client we will inform you that you may withhold or withdraw your consent and how to exercise that choice. If you do not withhold your consent, we will presume that you agree to us continuing to market the services or products.

With your consent we may:

• bring to your attention details of our services and products, which may be of interest to you;
• give certain information about you to other subsidiaries within our group for marketing purposes;
• inform you about another company's services or products and, if you respond positively, you may be contacted directly by that company.

We will not pressurise you by suggesting that access to any our services and products is conditional upon your consent. 

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What you can expect from us 

• taking into account your income and expenses, including the dependability of your income;
• how you handled your financial affairs in the past;
• information obtained from credit risk management services and related services, and other appropriate parties, for example, employers, other lenders and landlords;
• how you have conducted your previous and existing accounts with us;
• information supplied by you, including verification of your identity and the purpose of the borrowing;
• credit assessment techniques, for example, credit scoring;
• your age in relation to the loan facility required;
• any security or collateral provided; or
• your statement of assets and liabilities.

• the overall credit score;
• information obtained from credit risk management services; 
• over-indebtedness; or
• a specific policy of the bank.

With automated credit scoring systems these reasons may not be explicit, in which case only general reasons shall be provided.

If you want us to accept a suretyship or other security from someone for your loans, we will inform you and the surety or the surety’s legal adviser that the surety is entitled by law to your confidential financial information. 

We will:

• encourage the surety to take independent legal advice to make sure that they understand the commitment and the potential consequences of such a decision. All the documents the surety will be asked to sign will contain this recommendation as a clear and prominent notice;
• advise and caution the surety that by giving the suretyship or other security they may become liable instead of, or as well as, you;
• advise the surety whether it is a limited (and the maximum value) or unlimited suretyship and tell them about the implications of an unlimited suretyship; and
• inform the parties of the implications of suretyships in terms of their periods of validity, the potential amount/s of indebtedness, the nature of the debt covered and the cancellation/termination process.

• when you apply for a mortgage loan, and on reasonable request, we will explain to you the operation and repayment of your loan, including all the charges and costs, the benefits of payment acceleration and the additional interest and costs payable should your account fall into arrears;
• we will assist you to understand the wider responsibilities and rights that you will have as a property owner, and assist you with a detailed affordability assessment should you require it. This could include informing you about the repayments on your loan and additional costs that apply to homeownership, such as rates and taxes; 
• we will clearly explain what the potential impact of variable versus fixed interest rates will be so that you can make an informed decision in this regard; 
• we will explain to you that you risk the possibility of losing your property should you not keep up your loan repayments; and 
• we will also explain the steps required by law should we have to act to repossess your property due to your failure to meet your repayment obligations or your failure to comply with any other terms and conditions of the contract. 

• the assessed security value of the property; and
• the minimum replacement cost that we place on the buildings and improvements for insurance purposes.

• a description of the services and how to use them; and
• an indication of when the money you have sent abroad should be available to the recipient and any reason for potential delays;

With your co-operation, including timeous communication to us about your difficulties, we will take reasonable steps to develop a plan with you for dealing with your financial difficulties, consistent with both our interests and yours.

We recommend that you check your statements or savings account book regularly. If your statement or savings account book has an entry which seems to be wrong, you should tell us as soon as possible, so that we can resolve matters.

• To assist you to manage your account and verify entries on it, we will provide you with regular account statements. These may be monthly, quarterly, or at a minimum annually, unless this is not appropriate for the type of account. You may ask for account statements to be provided more frequently than normally available on your type of account. 
• Statement details may also be available on request, through electronic banking terminals or other means of electronic or telephone banking if you have registered for such facilities with us. 
• You may be charged an additional fee for statements requested over and above those normally provided. You should manage your use of statements to meet your requirements taking into account the charges associated with providing them.

We may keep (by arrangement) original cheques paid from your account or copies of these, for the period prescribed by law. If we do, we may charge a fee for supplying you with copies.

• If, within a reasonable period after the entry has been made, you dispute a cheque paid from your account, we will give you the cheque or a copy (where the cheque has already been returned to you) as proof of the instruction to pay. We may charge a fee for doing so.
• When we need to inform you that we have returned one of your cheques or other items as unpaid, we will do this within a reasonable period and in the most cost-effective way, assuring you of our efforts to maintain confidentiality and privacy.
• When we become aware that a cheque deposited by you is returned unpaid, we will inform you thereof within a reasonable period and in the most cost-effective way.
• When you deposit a cheque you should remember that we usually act as a collection agent on your behalf. We may, at our discretion, credit the value of this deposit to your account and determine if that credit may be accessed before we get value for the cheque ourselves. Should we in turn not receive value for any reason, we will reverse the credit and any associated interest.
• All banks (locally and internationally) work on the principle that if you hand a cheque to them for collection, they act as your agent to collect the funds from the cheque issuer’s bank. As such, and given the complexities of a cheque clearing system, they cannot accept responsibility for the loss or theft of the cheque in the system. Consequently, if a cheque or other payment instrument you deposit for collection is lost or damaged, you will have to approach the issuer of the cheque or instrument to stop payment (if it has not already been paid out) and to issue a replacement cheque or instrument. If you provide us with the relevant details of the drawer of the ‘lost’ cheque, and you mandate us in writing to act on your behalf, we will take reasonable steps to get a replacement cheque. We may require an indemnity from you in case the original cheque has already been paid to you. 
• We will advise you of the various ways of issuing a cheque.

• We may issue you a card, or replace one that has already been issued, and may charge fees for this.
• Your PIN (Personal Identification Number), password and other unique means of identification are strictly confidential. Where a bank supplies these, they will be issued only to you, separately from your card where applicable. You should never disclose your PIN, password, or other unique means of personal identification to anyone, and specifically not any employee of the bank.
• We will tell you if you can select your own PIN, password or other unique means of personal identification. We will encourage you to avoid birth dates and simple sequences numbers such as 1111; 12345 and so on. 
• We will inform you of the procedures to change your PIN, password or other unique means of personal identification when the need arises.
• We will publish the contact details you should use to report lost or stolen cards or chequebooks in statements, at ATM’s or through other means of communication to you.

• where you have not received your card and it is misused by someone else;
• for all transactions not authorised or effected by you after you have informed us (and we have given you a reference number) of the information listed in 5.9.1 (except “e-cash” transactions which we cannot audit). 
• if additional money is transferred from your account to your electronic purse after you have informed us of its loss or theft (and we have given you a reference number) and you have informed us that someone else knows your PIN, password or unique means of personal identification; or
• where system malfunctions have occurred in ATMs, or associated systems, which were not obvious or subject to a warning message or notice at the time of use.

• if we are compelled to by law;
• if you have not used your account for a significant period of time;
• if we have reasons to believe that your account is being used for fraudulent purposes.

There are certain principles that you as our client should adhere to in our relationship.

• your chequebook, savings account book, cards and/or electronic purse have been lost or stolen;
• someone else knows your PIN, password or your other unique means of personal identification; or
• there are transactions on your accounts which you have not authorised.

• do not keep your chequebook or your PIN and cards together;
• do not allow anyone else to use your card, PIN, password or other unique means of personal identification;
• always take reasonable steps to keep your card, PIN, password or other unique means of personal identification secret, safe and secure at all times; never disclose your PIN or password to anybody, including family, friends or any bank employee who offers to assist you;
• never write down or record your PIN, password or other unique means of personal identification. If you must write it down, ensure that it is not accessible to others and that it is disguised. For example, never write down or record your PIN using the numbers in the correct order; 
• be alert to the risk of muggings and card swapping when using ATMs or other electronic banking devices ;
• do not use ATMs or associated systems that have obviously been tampered with or that contain warning messages;
• do not use PINs that are easy to guess, such as 1111 or 12345 or your date of birth, etc; and
• use your credit card with care.

Internet and telephone banking services make some banking services and transactions more easily accessible. However, as with all our products and services, there are certain basic precautions that you should take to protect yourself against fraudulent transactions. Ensure that you familiarise yourself with these on our website or Internet banking portal, or with our telephone banking department.

• Review your bank statements and reconcile your accounts regularly.
• Do not under any circumstances reveal your secret access code/ PIN/password or other unique means of personal identification to anyone, and especially not to one of our staff members, as this can be used to access your electronic banking facility.
• Check the site security certificate for the Internet banking site each time before you do your banking.
• Ensure that a temporary password is changed to a password of your choice known only to you. 
• Should you be aware that your secret access code/ PIN/password or other unique means of personal identification has been observed by anyone, change it immediately.
• The security of your personal computer is your responsibility.
• Ensure that you read and are familiar with the Terms and Conditions of your bank’s website and the product terms and conditions on the website. 
• Enter numbers accurately when doing your banking and in particular with telephone banking. 
• Ensure that you make payments to the correct account or beneficiary. We cannot reverse duplicate or erroneous payments you make to other accounts without the specific consent of the account holders.
• Do not use the browser facility to store your password in order to avoid having to enter it each time you transact using Internet banking.
• Ensure that there is adequate anti-virus and security software installed and enabled on the computer you use for Internet banking. 

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It is important that your disputes with us are addressed most effectively.

It is important that you contact us first and give us the opportunity to resolve your dispute before lodging a formal complaint. 

If we do not resolve your dispute, or you are not satisfied with the outcome of our dispute handling process, you are welcome to make use of the services of the Ombudsman for Banking Services. We will also, where relevant, give you information on other Ombudsman offices, which might have jurisdiction over your complaint.

The Banking Association of South Africa will monitor and review this Code periodically. You can submit complaints and suggestions concerning the terms and general operation of the Code in writing to the Banking Association of South Africa. 

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These definitions explain the meaning of some of the words and terms used in the Code. They are not precise, legal or technical definitions.