BNK601: Banking Law

Semester 1
TUTORIAL 9 Solutions

1. Briefly explain the interaction between the Sales of Goods Acts [Cap 230] revised 1985 and the
Fijian Competition and Consumer Commission [FCCC] Act 2010.
Sales of Goods Acts [Cap 230] revised 1985 provides statutory warranties and rules for the passing of
title to goods but consumers’ services were left without much statutory protection. Statutory protection
for consumers’ of services was provided by the Fijian Competition and Consumer Commission [FCCC]
Act 2010. It provides statutory warranties and prohibited conduct that was misleading or deceptive, or
making of misleading statements in relation to the provision of services(as well as goods) to persons who
suffered, or who were likely to suffer, from the conduct of another in contravention of the Act.

2. Briefly analyze the strategy carried out by the government on the Fiji Financial Sector
Development Plan[FFSDP] 2016-2025.
This plan addresses the protection of consumer of services, the protection by government is to basically
review existing consumer protection law to ensure that regulatory framework remains relevant to promote
consumer confidence, choice and competition.

3. Fiji Code of banking practice is a non-statutory framework, assess the importance of Fiji Code of
banking practice to consumer banking.
Consumers of banking services may recourse to any dispute through the code of banking practice if
statutory protection is insufficient. Participating Banks observing the Code are the following
member-Banks of the Association of Banks in Fiji: Australia and New Zealand Banking Group
Limited, Bank of Baroda Bank of South Pacific Limited , BRED Bank (Fiji) Limited , HFC
Bank , Westpac Banking Corporation.
The Code is written to promote good banking practice based on the following principles:
- That banks will act fairly and reasonably towards their customers;
- That banks will help their customers to understand how their accounts and banking services operate
through timely and adequate disclosure of information; and
- That customers and their banks have a mutual interest in maintaining the security and integrity of
banking systems and technology.
1.4 Specific services may have their own terms and conditions which will comply with these principles.
These will be expressed in plain language to the extent that it is consistent with legal certainty. (Fiji Code
of Banking Practice. P2)

4. The scope of the regulatory schemes depends upon two key factors: the nature of the product
and the identity of the consumer. Define financial product as discussed in the code of banking
practice,
Financial Product: is a facility through which a person makes a financial investment, manages financial
risk, or makes non-cash payment.

5. The need for disclosure requirement is essential for any banks as it is a requirement by law to
carry out this obligation. Briefly explain why disclosure is of essence to consumers of banking.
Legislation and banking codes make provisions for disclosure so that consumers make informed decision
as to whether to acquire financial product. Banks have to disclose to consumers the terms and conditions
of banking services on request.

6. The Uniform Consumer Credit Code (UCCC) permits no contract to be entered into until a pre-
contractual statement and an information statement are provided. Provide explanation on the
significance of pre-contractual statement.
Code of banking practice does not specifically provide for pre-contractual disclosure, it only outlines the
required content of the terms and conditions of banking services. The bank is required to provide the
terms and conditions of baking services to the consumer at the time of, or before, the contract. Terms and
conditions must include information about the bank’s obligations regarding the confidentiality of the
consumer’s information and complaint handling procedures.

7. When the banking service contract information on loan service is not regulated, the bank must
disclose the consumer of the repayment details. State the information the bank must disclose to the
customer on the loan service provided to consumers (refer to Fiji Code of Banking practice).

(i) The rate of interest for the loan, and whether it may be changed during the period of the loan;
(ii) All fees and changes which would apply;
(iii) Any Government charges, including taxes;
(iv) The specified period for which the loan is available, where relevant;
(v) Other significant factors of the loan such as security requirements, termination fees or late
payment penalties in an endeavor to ensure that a prospective borrower understands the principal
terms of any borrowing arrangement.
8. The conduct of banks and other credit providers is closely regulated. The code attempts to
prevent advertising from being misleading or deceptive. Outline a clause from the Fiji Code of
Banking Practice that states informative way of advertising their financial product.
Clause 3.7 states that in any advertisement that includes a deposit interest, in addition to any
disclosure required by law, banks will include a statement that full details of the terms and
conditions will be available on request. Upon request, banks will provide the following
information:
(i) The rate of interest for the specified period and whether it may be varied over the period of
the deposit;
(ii) Any fees and charges which would apply;
(iii) Any applicable Government charges and taxes;
(iv) The timing of interest payments; and
(v) Other significant factors such as the consequences of early or partial withdrawal of the
deposit.