APRA and Treasury to act on major lenders debanking fintech

[ad_1]

Jim Chalmers said: Our response highlights governments’ commitment to take action on debanking and our intentions to balance support for affected businesses, while also recognizing that banks are commercial enterprises and must manage their own risks and resources.

Banks may need to document the reasons why customers are debanked, provide them with the reasons for their debanking, and ensure that affected customers have access to banking dispute resolution procedures. Banks may be required to provide at least 30 days notice before closing a customer service.

The measures come after Senate committee hearings in September 2021, where global payments company Nium said Australia was the only country out of 40 where it had closed bank accounts without adequate explanation, after two of the big four banks terminated their banking relationship without providing him with an opportunity to illustrate his approach to compliance. This forced him to use a multinational bank for his Australian business. FinTech Australia said at the same hearing that around 100 fintechs had closed bank accounts and most were afraid to speak out for fear of further alienation.

In another hearing in January last year, London-based Wise accused Australian banks of anti-competitive behavior by refusing to provide banking services to it for several years. Wise competes with banks by offering cheaper cross-border payments through an app.

AUSTRAC expressed concern that removing banking would reduce the visibility of transactions moving through the payment system and make it more difficult to monitor the economy for financial crime.

The Australia Financial Review this week reported tighter restrictions on payments to crypto exchanges. This includes Cuscal and major banks suspending customers wishing to transfer money to crypto exchanges with monthly limits.

[ad_2]