Banks will be required to provide detail of fees and charges that apply to small to medium enterprises (SMEs) which run into financial difficulties, under a revised code of conduct published by the Central Bank today.
It is one of a number of changes contained in the revised SME code which focuses on banks’ obligations when dealing with sme’s facing financial difficulty.
A full review of the original code for business lending to SMEs, which dates from March 2009, will be undertaken next year.
Among the provisions included in the revised code is the requirement that banks inform SMEs about the information they need in order for an alternative repayment assessment arrangement to be undertaken.
A lender must complete this assessment and inform the business of the decision within 15 days, and have systems in place to allow the SME to appeal the decision.
In addition, if an SME is concerned about meeting repayments, the lender must offer the customer an immediate review meeting to asses if an alternative repayment arrangement can be reached.
The revised code will come into effect in January.
Commenting on the revised code, director of consumer protection at the Central Bank, Bernard Sheridan, said the revised requirements introduce a clear framework for lenders to deal with SMEs in or facing financial difficulties.
"The framework has been designed to assist SMEs and lenders to work together to address existing or emerging arrears situations and financial difficulties."
