De-banking occurs when a bank declines to provide banking services or withdraws banking services from an existing customer.

In August 2022, the Council of Financial Regulators (CFR) provided the Australian government with advice on potential policy responses to de-banking. The advice was commissioned in response to the recommendations in the final report of the Senate Select Committee on Australia as a Technology and Financial Centre.

The government recognises the seriousness of de-banking and understands that inaction on the issue will stifle competition and innovation in the financial services sector and may drive businesses underground and to operate exclusively in cash.

The response highlights the Australian government’s commitment to taking action on de-banking, and their intentions to balance support for affected businesses, while also acknowledging banks are commercial enterprises and must manage their own risks and resources.

In response to CFR’s advice, the government:

• Agrees to the data collection recommendation;
• Supports the transparency and fairness measures recommendation in principle;
• Supports the guidance by major banks recommendation in principle; and
• Notes the capability uplift recommendation.