FINANCE LAW

Ben conducts a F&B business in Melbournes CBD. The business has recently lost 70% of its income for the months of March through to June because of the pandemic.

He approached his bank, XYZ Ltd, to increase his current loan amount but the bank refused. They justified their decision by stating that his reduced income was unlikely to improve according to experts in the bank. Is the bank obliged by the Code of Banking Practice to provide Ben with a new loan or to increase the existing loan amount due to his circumstances caused by the pandemic?

Required

Issue:

Relevant Laws: Code of Banking Practice:Clause 49 and 51(a) and (b). (Banking Law in Austalia)

Application: Explain the above clauses in the Code of Banking Practice and apply to the question.

Conclusion: