This is an old version of the Code of Banking Practice. View the current Code
11.1 Glossary
11.2 Principal Legislation
11.3 Participating Banks
This glossary explains the meaning of words used in this Code and other common banking terms. They are not precise legal or technical definitions.
The bank which provides Card payment services to a Merchant.
Arrangements by which Customers instruct their banks to make regular payments for a fixed sum from their account into another bank account.
Electronic terminals that allow Customers to use Cards and PINs to access their accounts, withdraw cash, make deposits, transfer funds or access other services.
A cheque that is purchased from, and drawn on the account of a bank.
A one-off transfer of funds from the paying customer’s account to a pre-established payee’s account, which is initiated by the paying customer. The paying customer decides the payment amount and the payment date for each payment and advises the paying bank, via their bank’s telephone banking service, Internet Banking service or other means.
A term for a customer contact site which the customer can physically visit and carry out their general banking requirements. They may also be called “representative offices”, “pods”, “outlets”, “customer service centres”, etc.
A general term for any Card that can be used to pay for goods and services, or to access ATM machines or other electronic banking services such as EFTPOS. Examples are:
The reversal by the bank of transactions made to Customers’ Credit Card accounts which are found to be:
Charges for providing services; for example, Commission is charged by the bank when customers buy or sell foreign exchange.
An arrangement by which the bank provides funds to a customer in exchange for a promise to repay at a later date, along with any interest and charges payable.
These may take several forms; for example, Overdrafts, loans secured against a given Security or unsecured loans.
Companies that hold records of a Customer’s Credit history.
Ways of marking cheques to limit the ease with which they can be exchanged for cash. Limited protection will be given by parallel lines across the front of the cheque. This crossing provides only a very limited protection if the cheque is lost or stolen; essentially it means only that the cheque should not be cashed but should be paid into a bank account. This protection can be improved by writing the following words between the transverse lines:
As used in this Code, “Customers” means all Customers of a participating bank other than Wholesale Customers (generally referred to as “you” or “your” in this Code).
Companies whose business is to collect debts from people who have failed to meet any obligation to pay.
Failure to repay Credit or to meet other conditions that were promised or agreed to.
Arrangements by which payments, such as salaries, are directly credited to Customers’ bank accounts.
The party who initiates a Direct Debit under a Direct Debit system from a Customer’s account at the Customer’s bank.
Arrangements by which a Customer authorises the bank to make payments directly from their accounts to a third party who has initiated the arrangement. The amounts can be fixed or variable. If variable, the Direct Debit Initiator must give prior notice to the Customer of variations.
Disclosure to Customers of financial and other information by banks as required by the Reserve Bank of New Zealand Act 1989.
Cheques that are presented for payment and are not paid, leaving the person to whom the cheque is payable without the money.
A scheme which has been approved under the Financial Service Providers (Registration and Dispute Resolution) Act 2008.
A method of payment by which Customers can use Cards to pay electronically for goods or services or to obtain cash.
The rates at which your bank will buy or sell foreign currency.
Legal arrangements by which someone (the guarantor) promises to repay the debts of a Customer if that Customer Defaults in making repayment.
As used in this Code, “inform” refers to any written (in electronic or paper form) or oral communications from banks to Customers, whether delivered in person or not, about any bank products or services.
Means use of a computer or device to connect you to our electronic banking channels via the internet and to carry out a range of transactions and obtain information about your account.
Where two or more parties enter into an obligation jointly and severally, the obligation may be enforced fully against all or any of them.
Any suppliers of goods or services who accept payments by Card.
The withdrawal of funds from bank accounts, to a greater total amount than a Customer’s Credit balance, with or without prior arrangement.
Aconfidential combination of letters and/or numbers used by Customers to establish their right to access to their accounts.
Confidential numbers used by Customers to access their accounts via ATMs, EFTPOS facilities, the internet and other electronic banking services such as telephone banking.
Means necessary and appropriate modification and adjustments not imposing a disproportionate or undue burden, where needed in a particular case, to ensure to persons with disabilities the enjoyment or exercise on an equal basis with others who use our services. (This definition has been adapted from Article 2, Draft Convention on the Rights of Persons with Disabilities, Eighth session, New York, 14-25 August 2006).
A service offered by some banks by which valuable items such as house titles, wills or share certificates can be deposited in a bank for safe-keeping, usually subject to a fee.
The promising of assets (such as titles to property, life policies and shares) to banks as support for Credit Facilities granted to Customers. A mortgage document is a common type of Security, in which property is used as Security for a loan. If the Credit Facilities are not repaid, the bank’s position is “secured”, which means that it can sell the assets to meet the outstanding debts.
Customer requests for prompt clearance of cheques, usually subject to a fee.
A term commonly used to describe the stopping of a cheque or some other types of payments.
A contract between a customer and a bank, whereby the customer lodges a deposit with the bank for a mutually agreed period of time. Banks pay a set rate of interest on these deposits. If the customer wishes to access funds before the maturity date, there may be a fee charged and/or interest penalty for breaking this contract.
Security provided by a person who is not the borrower.
Specially printed cheques available for Customers to purchase, usually for use overseas, to obtain cash and pay for goods or services. Travellers Cheques are available in fixed amounts in a number of major world currencies. Security is maintained by signing the cheque at the time of receipt and adding a second matching signature on presentation for payment. A Commission is generally payable on the purchase of these cheques.
Items recorded on an account that have been made without the Customer’s authority.
Wholesale Customers has the same meaning as “wholesale clients” as defined in section 5C of the Financial Advisers Act 2008.
Government taxes on interest income that banks and other interest payers must deduct from interest payments to residents and non-residents.
Some subsidiaries and related companies of the above member banks are excluded from coverage under this Code. You may obtain a full list of such subsidiaries from the Office of the Banking Ombudsman.