11. Appendix

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

 11.1 Glossary

This glossary explains the meaning of words used in this Code and other common banking terms. They are not precise legal or technical definitions.

Acquiring Bank

The bank which provides Card payment services to a Merchant.

Automatic Payments

Arrangements by which Customers instruct their banks to make regular payments for a fixed sum from their account into another bank account.

ATMs (Automatic Teller Machines or Cash or Money Machines)

Electronic terminals that allow Customers to use Cards and PINs to access their accounts, withdraw cash, make deposits, transfer funds or access other services.

Bank Cheques

A cheque that is purchased from, and drawn on the account of a bank.

Bill Payments

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.

Branches

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.

Card

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:

  1. Cash Cards – Cards used to obtain cash from ATMs.
  2. Charge Cards – similar to Credit Cards. They allow Customers to pay for purchases and, in some cases, to obtain cash advances. When the monthly statement is received, the balance must be paid in full.
  3. Credit Cards – Cards that allow Customers to buy on Credit and to obtain cash advances. Customers receive monthly statements and may pay the balance in full or in part, though there is usually a specified minimum payment.
  4. Debit Cards – Cards that can be used to access your accounts to obtain cash or make a payment at a point of sale. Customers’ accounts are debited electronically for these transactions.
  5. Multi-Function Cards – Cards that combine more than one of these functions.
  6. Pre-paid Cards – Cards which are pre-loaded with funds, and not linked to your accounts, that can be used to pay for goods and services or which can be accessed via ATM machines.

Chargebacks

The reversal by the bank of transactions made to Customers’ Credit Card accounts which are found to be:

  1. incorrect, invalid or unauthorised charges, and
  2. notified to the bank within the reasonable time limit.

Commissions

Charges for providing services; for example, Commission is charged by the bank when customers buy or sell foreign exchange.

Credit

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.

Credit Facilities

These may take several forms; for example, Overdrafts, loans secured against a given Security or unsecured loans.

Credit Reference Agencies

Companies that hold records of a Customer’s Credit history.

Crossed (Cheque)

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:

  1. account payee only; or
  2. not transferable.

Customers

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).

Debt Collection Agencies

Companies whose business is to collect debts from people who have failed to meet any obligation to pay.

Default

Failure to repay Credit or to meet other conditions that were promised or agreed to.

Direct Credits

Arrangements by which payments, such as salaries, are directly credited to Customers’ bank accounts.

Direct Debit Initiator

The party who initiates a Direct Debit under a Direct Debit system from a Customer’s account at the Customer’s bank.

Direct Debits

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 Statement

Disclosure to Customers of financial and other information by banks as required by the Reserve Bank of New Zealand Act 1989.

Dishonoured Cheques

Cheques that are presented for payment and are not paid, leaving the person to whom the cheque is payable without the money.

Dispute Resolution Scheme

A scheme which has been approved under the Financial Service Providers (Registration and Dispute Resolution) Act 2008.

EFTPOS (Electronic Funds Transfer at Point of Sale)

A method of payment by which Customers can use Cards to pay electronically for goods or services or to obtain cash.

Exchange Rates

The rates at which your bank will buy or sell foreign currency.

Guarantees

Legal arrangements by which someone (the guarantor) promises to repay the debts of a Customer if that Customer Defaults in making repayment.

Inform

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.

Internet Banking

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.

Joint and Several

Where two or more parties enter into an obligation jointly and severally, the obligation may be enforced fully against all or any of them.

Merchants

Any suppliers of goods or services who accept payments by Card.

Overdrafts

The withdrawal of funds from bank accounts, to a greater total amount than a Customer’s Credit balance, with or without prior arrangement.

Passwords

Aconfidential combination of letters and/or numbers used by Customers to establish their right to access to their accounts.

PINs (Personal Identification Numbers)

Confidential numbers used by Customers to access their accounts via ATMs, EFTPOS facilities, the internet and other electronic banking services such as telephone banking.

Reasonable Accommodation

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).

Safe Custody

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.

Security

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.

Special Answers

Customer requests for prompt clearance of cheques, usually subject to a fee.

Stop Payments

A term commonly used to describe the stopping of a cheque or some other types of payments.

Term Deposits (Investments)

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.

Third-Party Security

Security provided by a person who is not the borrower.

Travellers Cheques

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.

Unauthorised Transactions

Items recorded on an account that have been made without the Customer’s authority.

Wholesale Customers

Wholesale Customers has the same meaning as “wholesale clients” as defined in section 5C of the Financial Advisers Act 2008.

Withholding Tax (Resident (RWT) and Non-Resident (NRWT)) and Approved Issuer Levy

Government taxes on interest income that banks and other interest payers must deduct from interest payments to residents and non-residents.

 11.2 Principal Legislation

Principal Statutes Governing Banking in New Zealand

  • Anti-Money Laundering and Countering Financing of Terrorism Act 2009
  • Bills of Exchange Act 1908
  • Cheques Act 1960
  • Companies Act 1993
  • Consumer Guarantees Act 1993 (does not apply to business customers)
  • Credit Contracts Act 1981
  • Credit Contracts and Consumer Finance Act 2003
  • Criminal Records (clean Slate) Act 2004
  • Electronic Transactions Act 2002
  • Fair Trading Act 1986
  • Financial Advisers Act 2008
  • Financial Service Providers (Registration and Dispute Resolution) Act 2008
  • Financial Transactions Reporting Act 1996
  • Human Rights Act 1993
  • Investment Advisers (Disclosure) Act 1996
  • Lawyers and Conveyancers Act 2006
  • Minors’ Contracts Act 1969
  • New Zealand Bill of Rights Act 1990
  • Partnership Act 1908
  • Personal Property Securities Act 1999
  • Privacy Act 1993
  • Proceeds of Crime Act 1991
  • Property Law Act 2007
  • Protection of Personal and Property Rights Act 1988
  • Reserve Bank of New Zealand Act 1989
  • Securities Act 1978
  • Securities markets Act 1988
  • Terrorism Suppression Act 2002
  • Unclaimed Money Act 1971

Statutes Providing Access for Third Parties to Customer Information Held by Banks

  • Administration Act 1969
  • Child Support Act 1991
  • Commissions of Inquiry Act 1908
  • Companies Act 1993
  • Criminal Proceeds (Recovery) Act 2009
  • Customs and Excise Act 1996
  • Fair Trading Act 1986
  • Fisheries Act 1996
  • Financial Transactions Reporting Act 1996
  • Gaming Duties Act 1971
  • Goods and Services Tax Act 1985
  • Health and Disability Services (Safety) Act 2001
  • Housing Restructuring and Tenancy Matters Act 1992
  • Income Tax Act 2004
  • Incorporated Societies Act 1908
  • Industrial and Provident Societies Act 1908
  • Insolvency Act 1967
  • Law Practitioners Act 1982
  • Mutual Assistance in Criminal Matters Act 1992
  • Proceeds of Crime Act 1991
  • Privacy Act 1993
  • Public Finance Act 1989
  • Reserve Bank of New Zealand Act 1989
  • Securities Act 1978
  • Serious Fraud Office Act 1990
  • Social Security Act 1964
  • Student Loan Scheme Act 1992
  • Summary Proceedings Act 1957
  • Tax Administration Act 1994
  • Terrorism Suppression Act 2002

 11.3 Participating Banks

Members of the New Zealand Bankers’ Association

  • ANZ national Bank Limited (operating as ANZ Bank and the National Bank of New Zealand)
  • ASB Bank Limited
  • Bank of New Zealand
  • The Bank of Tokyo-Mitsubishi UFJ, Ltd.
  • Citibank, N.A.
  • The Co-operative Bank Limited
  • The Hongkong and Shanghai Banking Corporation Limited
  • JPmorgan Chase Bank, N.A.
  • Kiwibank Limited
  • Rabobank New Zealand Limited
  • Southland Building Society
  • TSB Bank Limited
  • Westpac New Zealand Limited

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.