Australian banks have agreed to a new code of conduct following several meetings with key stakeholders over the past nine months.

The new Banking Code of Practice has now been sent to Australian Securities and Investments Commission (ASIC) for approval.

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The new set of codes is aimed at bringing greater transparency around products and services. It includes a new deferred sales model for consumer credit insurance on credit cards, small business contracts written in simple terminology as well as gives the customer the right to close a credit card account online.

Furthermore, the customers will be informed before their introductory credit card interest free period expires.

All the banks also agreed to identify customers facing financial difficulty and then introduce better safety nets for guarantors.

Under the new set of proposals, the banking industry has accepted 96 of the 99 recommendations.

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Australian Bankers’ Association CEO Anna Bligh said: “Banks are committed to change and the new Code is stronger, broader and written in simple to understand language. It has been completely rewritten to better meet community expectations and service the needs of customers.

“The new code has been broken into 10 key parts, with four brand new sections including one dedicated to small businesses and another related to making banking more available for customers and easier to access.

“The remaining six sections represent a complete restructure of important parts of the current code.”

Devising new codes was a part of the major industry initiatives announced in April last year that aims to raise banking standards in the country.