The Banking Royal Commission finally came out with the interim report which covered consumer lending, financial planning, business lending, farm finance and Indigenous finance. The primary concern was that what led to the poor behavior of the banks and what needs to be done, so that this type of behavior gets stopped. Commissioner, Kenneth Hayne, believes that the greed was the primary reason which led to the misconduct on the part of banks. With that, he meant that the banks are entirely focusing on the short-term profits rather than focusing on the honesty principles. The commissioner also referred that charging the advice fees to the person is no more clearly reflects that the banks are on the way to garner short-term profits. However, this type of behavior by the banks could impact the bank’s fundamentals. It reflects a dent to the bank’s credibility.
The commissioner also pointed out that the performance of all the employees (including the executives) is being determined by the sales done and by the profit garnered. According to the commissioner, the regulators were also at fault. He believes that when the poor behavior of the banks came to light, no punishment was given to the defaulters. Even if the punishments were given, they were insufficient and were not up to the mark.
The commissioner also pointed that law has already been in force which requires the banks to engage in such activities and acts which would not be detrimental to the general public. The Federal Treasurer blamed ASIC for the adverse effects caused to the general public. He added that ASIC should be more attentive and tighter against the banks involved in such activities. Tanya Plibersek views that the commission should be extended and thus making the access of general public easy. With this, more people would be able to tell their cases.
The chief executive officer of Australian Banking Association stated that greedy behavior of the banks would not at all be tolerated. The chief executive also stated that Australian banks should be ashamed of themselves for carrying out the acts which were completely uncalled for. She also added that it is very important to win back the Australian’s trust which has been lost.
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