Established November 22, 2005
(Revision of Code of Ethics established in September 1997)
Partially revised February 14, 2013
Partially revised November 14, 2013

Japanese Bankers Association

Banks, the nucleus of the financial services industry, are public entities in their nature and responsibility to broadly contribute to the economy and society. Consequently, banks are expected to play a role in assisting the reforms being promoted throughout society today.
We, the banks, hereby establish the Code of Conduct, with the view that banks continue to endeavor to fulfill societal expectations by doing their duties toward creation of a sustainable society while respecting the human rights through maintaining strict self-discipline.

In complying with the Code, it is important that the top management of banks take the lead and demonstrate strong leadership so that every bank employee comprehends the importance of the Code and acts according to the Code.
Banks, their executives and their staff must bear in mind that it is essential for banks to nurture societal confidence in them by completing their mission of contributing to the development of the economy and society. Specifically, banks must do so by complying with this Code and the meanings of individual rules and providing high-quality financial services that fulfill the true need of customers.
In the event of an incident among members that would remarkably violate the intention of the Code, JBA will activate its self-corrective function and bring the matter up to the Advisory Committee for Self-discipline of Member Banks and initiate strict action against the member.

Explanation of Code of Conduct

(Public Mission) 1. Banks shall develop solid societal confidence by soundly conducting operations with a constant awareness of the public mission of banks.

(1) Public Mission

From the perspective of economic activity, it is vital that banks perform payment and intermediary functions by accepting deposits from a wide range of entities and providing necessary funds to companies, individuals, the public sector, and so forth, and therefore have a mission to contribute to the sound development of the economy and society.
Article 1 of the Banking Act also stipulates that “The purpose of this Act is, in view of the public nature of banking services and for the purpose of maintaining their credibility, securing protection for depositors, etc. and facilitating the smooth functioning of financial services, to ensure the sound and appropriate operations of banking services, thereby contributing to the sound development of the national economy.”
As such, banks are entrusted with an important public mission and required to find an optimal balance between this and their purpose as private companies.

(2) Establishing Confidence in Banks

In order to fulfill the public mission of banks, it is essential to operate banking services soundly and appropriately, and in so doing, establish solid societal confidence in them.
While considerable time and effort are needed to establish the confidence of a broad range of stakeholders (interested parties), such as customers, shareholders and investors, as well as local communities, it is extremely easy to undermine this confidence. Moreover, loss of confidence in an individual bank may even lead to reduced confidence in the financial system.
Banks therefore depend on the confidence of stakeholders—and by extension society—and must always bear in mind that this serves as the foundation of fulfilling their mission.

(3) Formulation of Corporate Ethics

In order to maintain and enhance enduring confidence in banks, each bank must formulate strong corporate ethics and ensure that they are instilled and firmly established throughout the entire organization through various measures.
In formulating corporate ethics, it is necessary for top management to demonstrate and make thorough efforts to apply them themselves, as well as for all individual executives and employees to personally adopt them and put them into practice.

(4) Management Based on the Principle of Self-Responsibility

As de-regulation extends and customers’ needs become increasingly diversified and sophisticated, in order for banks to continue carrying out their mission sufficiently, it is necessary for them to more comprehensively practice management that is based on self-responsibility supported by self-regulation.
In order to advance such management, banks are required to ensure their sound finance structures, appropriate operations, and so forth. To this end, it is crucial to develop an appropriate management system, including assignment of required personnel, while reviewing the nature of administrative decision-making mechanisms, administrative monitoring, etc., and to aim for sounder, more efficient business operations through the leveraging of effective governance functions.

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(Offering High Quality Financial Services) 2. Banks shall contribute to the development of the economy and society both domestically and internationally, by functioning as an infrastructure to support economic activities and by offering high quality financial services that give due consideration to the appropriate protection of customers’ profits through improving security levels and securing business continuity in the event of a natural disaster, while addressing customers’ needs through employing creativity and originality.

(1) Function as an Infrastructure to Support Economic Activities

Banks serve function as financial intermediaries between economic entities and support economic activity in Japan. Moreover, as a provider of payment functions, which is one of the most important infrastructures for economic activity, banks supply various types of highly convenient and safe payment services.
The importance of such functions that support economic activity will heighten further along with the development of economy and society, and banks must therefore continually strive to improve these functions even more.
As well, in order to maintain such public functions, it is paramount that banks undertake advance planning and preparation so that they are able to resume their operations within as short a period of time as possible in the event that normal operations are interrupted due to the occurrence of a natural disaster, accident, etc., and take measures such as reviewing these plans and preparations on an ongoing basis.

(2) Offering High Quality Services That Meet Customer Needs as Well as Leading to Resolve Social Issues

Given changes to society’s framework such as the declining birthrate and aging population, and further advancement of economic globalization, various reforms are underway in many kinds of fields. In the financial industryfield, as de-regulation in such as financial conglomeratization and the expansion of sales channels for financial products and services advance, there are major environmental changes occurring as well, such as the increased need for more efficient management of financial assets and for smooth fund provision for developing industries and countries that will lead the way for the next generation.
Furthermore, even financial technologies continue to become more sophisticated, with the utilization of new approaches such as the liquidation of assets and derivatives trading, as well as remarkable developments in information processing and communications technology in the area of payment services.
Banks must aim to improve convenience for customers and obtain their satisfaction by proactively responding to these environmental changes and offering high quality financial services suited to diversifying customer needs through employing creativity and originality. In conjunction with this, they must strive to make proactive efforts to offer financial services that will lead to the resolving of social issues. In delivering financial products and services, banks must take the care required in order to meet reasonable customer expectations and perform their business in a careful manner with integrity and professionalism.
In order to offer such services smoothly and appropriately, it is necessary to make efforts to further strengthen appropriate risk management systems suited to the scale, nature, and risk profile of operations, bearing in mind the growing diversity and complexity of finance-related risks.
In addition, considering their importance as the financial market’s economic infrastructure, banks are playing an essential role as a participant in this market. They are therefore also required to act in a manner that will improve the functioning of the overall market and ensure transparency and fairness.

(3) Provision of Information That Helps Customers Make Correct Judgments

As a service provider, banks have a natural duty to accurately disclose and explain the details of products and services they provide, and they must strive to provide timely, clear, and fair information and advice that will help customers make correct judgments.
Based on the fact that products which banks handle are becoming more diversified along with the further advances in regulatory easing and that banks are handling more non-deposit products with high risks, they must firmly bear in mind their duties as a provider of such products and services including those that correspond to customers’ knowledge, experience, asset situation, transaction purpose, etc.; providing adequate explanations, including the risks and costs when providing these products and services; providing explanations that do not abuse the advantageous position of banks and cannot be misinterpreted by customers; responding sincerely to questions and complaints; and working to promote financial knowledge and education.

(4) Prevention of Crime which Misuse Customers’ Bank Account

Incidents occur in which payment functions and the like provided by banks are misused for criminal purposes, such as the use of deposit accounts to handle funds acquired via fraud or other crimes. Banks must strive to contribute to the development of a safe and secure society through collaborating with the relevant authorities and taking timely, appropriate measures against such criminal behavior.
In addition, in order to ensure the safety of deposited funds, banks must strive to improve security levels against fraudulent withdrawals via cash cards, passbooks, online banking, etc.
Banks must provide customers with appropriate information and education on an ongoing basis in response to the diversification of such bank account-related crime and strive to take preventive measures, as well as making sincere responses to customers who have been victimized by a crime, in accordance with their individual circumstances.

(5) Consideration for Disabled and Elderly Customers

Banks must strive to provide facilities and services that are easily accessible to everyone, including disabled and elderly customers, by advancing efforts to develop facilities and services that are barrier-free and based on universal design.

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(Strict Legal Compliance) 3. Banks shall strictly comply with all laws and regulations, and perform honest and fair operations that satisfy social norms.

(1) Compliance

With regard to financial transactions, there are many laws and regulations that banks should comply with to ensure fair competition, prohibit insider trading, prevent money laundering, and so forth. Banks must rigorously comply with these laws and regulations as a matter of course, as well as maintaining a sensible approach to business and refraining from unsound financial and business activities that contravene social norms. In addition, in conducting overseas activities, it is necessary to rigorously comply with local laws and regulations and respect international norms, including human rights, as well as take into account local culture and customs and striving to contribute to the development of local communities.
From the perspective of banks, for whom trust may be considered the most important asset, compliance is a fundamental principle in increasing the soundness of management and establishing solid trust from society, and each individual executive and employee must consistently put it into practice in their daily business.

(2) Efforts to Put Compliance into Practice

In order to ensure the consistent practice of compliance, it is necessary for each bank to establish an internal management system aligned with its circumstances and devote attention to the following three functions: 1) primary checking by the operations department, 2) secondary checking by departments independent of the operations department, and 3) objective assessment and auditing by certified public accountants and the like.
In addition, in creating this system, it is important to clarify duties, as well as building an open organizational culture supported by independent and aware personnel.

(3) Thoroughly Enforcing Compliance

Contravening laws and regulations is directly related to management risk, and managers, recognizing that they have a duty to implement thorough compliance, must develop a system that will prevent risks from occurring, as well as establishing a system that enables top-level management and executives to rapidly understand the actual conditions of the risk and problem areas. As part of this system, it is necessary to develop reporting and consultation channels that are independent of the normal chain of command.
If problematic behavior or the like is discovered or pointed out, it is essential for top-level management to have a strong awareness that covering up the situation or delaying its resolution will lead to enhanced risk and top-level management needs to clarify the situation and identify the cause, and is required to strive to rapidly resolve the problem and take thorough steps to prevent recurrence, as well as promptly providing the public with a clear explanation of how the problem developed, what countermeasures were taken, etc.

(4) Proper Protection of Customer Information, Etc.

Due to the nature of their business, banks possess a large volume of information related to customers and so forth, which for the most part is related to assets and credit. It is necessary for banks to recognize the importance of information management in our advanced information society and devote meticulous care to the handling of information relating to customers, etc.
In particular, banks must establish and administer a comprehensive security management measure aimed at preventing leaks and the like of personal information that complies with the letter and spirit of the Act on the Protection of Personal Information, the Guidelines for Personal Information Protection in the Financial Field stipulated by the Financial Services Agency, the Personal Information Protection Guidelines stipulated by the All Banks Personal Data Protection Council, etc., as well as handling the information carefully and appropriately.

(5) Establishment of Fair and Transparent Relations with Suppliers

In purchasing goods and services, ordering systems, etc., banks shall conduct transactions in an honest manner according to fair market rules and appropriate business practices, and they must ensure fairness and transparency in their relationships with suppliers. During such transactions, they must strive to pay attention to not only economic rationality but also compliance, environmental standards, etc., on the supplier’s side.

(6) Establishment of Sound and Proper Relations with Government

Banks shall establish and maintain sound and proper relations with government and must not give gifts to or entertain public officials and the like for the purpose of obtaining inappropriate favors, etc.

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(Communication with Society) 4. Banks shall communicate widely with society, including proactively and fairly disclosing business information.

(1) Importance of Disclosure by Banks

Given that they have a public mission, banks are required to obtain broad understanding and trust from shareholders and investors as well as society as a whole.
Fairly disclosing business information and seeking for the choices and decisions of the market and customers contributes to secure the understanding and trust of society, as well as leading to greater self-purification capacity for ensuring sound management. Moreover, it is important for banks to not only disclose management and other information on financial issues, but also to proactively disclose information on diverse initiatives relating to social and environmental issues, and obtain understanding from a broad range of stakeholders.
In disclosing such information, banks must comply with related laws and the like as a matter of course, as well as striving to convey various types of information needed for stakeholders to make rational decisions in a timely and appropriate manner.

(2) Reflecting Stakeholders’ Opinions in Management

Banks must provide fair and useful products and services that correspond to the needs of society, and it is important to strive to improve the quality of services by obtaining a broad range of customer opinions. In addition, banks are required to undertake broad mutual communication with society on their activities, including social and environmental initiatives, and to understand the expectations and desires of stakeholders and apply them to their management.
Through efforts to accept the opinions of stakeholders, banks may face harsh criticism, but they must bear these opinions in mind as well while objectively reviewing their activities from various angles, and make strenuous efforts toward ensuring sound management and improving the quality of financial services.

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(Respect for Human Rights of Bank Employees) 5. Banks shall respect the human rights and personality of individual bank employees and preserve safe, comfortable work places.

(1) Respect for Human Rights of Bank employees and Ensuring a Comfortable Work Environment

In order to respect the human rights and privacy of bank employees, as well as ensuring safe and enjoyable work places, banks must strive to engage in discussions and consultation with bank employees directly or with their representatives in an honest manner. Moreover, it is necessary to take measures to prevent improper treatment or discrimination in the work place, such as sexual harassment or power harassment.

(2) Creating a Work Place Where Bank Employees Can Make the Most of Their Skills

Banks must support the career and skills development of bank employees so that each individual can make the most of their talents while leveraging their uniqueness and creativity, as well as performing workforce management and treating bank employees in a fair manner.

(3) Supporting Work-Life Balance

In view of the ongoing declining birthrate and aging population, banks must strive to expand their support system for bank employees dealing with childbirth, child-rearing, and family care in order to alleviate the burden on them as much as possible. Moreover, it is necessary for banks to facilitate the harmonizing of work and life so that each individual bank employees will feel satisfaction in their work and meaning in their life and be able to pursue the desired balance between various types of activity (work, home life, community activities), as well as establishing a human resources management system that enables the employment of various personnel.

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(Tackling Environmental Issues) 6. Banks shall proactively tackle environmental issues through the effective use of resources, reduction in disposed objects and offering financial services that contribute to environmental preservation.

(1) Promoting Resource-Saving, Energy-Saving, and Recycling Activities

Recognizing the burden on the environment arising from the consumption of resources and energy and disposal of waste materials and the like in business activities, banks must work to reduce their environmental burden through the promotion of resource-saving, energy-saving, and recycling, comply with regulations based on environment-related laws and so forth, and proactively execute countermeasures for global warming and establishment of a material-cycle society.

(2) Offering Environmentally Friendly Financial Products and Services

It is important for banks to not only reduce the environmental burden due to their own operations but also contribute toward solving environmental issues arising from core banking activities, and they must develop and offer environmentally friendly financial products and services.

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(Activities Contributing to the Society) 7. Banks shall proactively implement activities including philanthropy as a good corporate citizen, being fully aware that they can exist and develop only with the society.

(1) Contributing to the Society

Being aware that the banking business cannot exist without the sound development of society and that society is the basis for banks’ existence, banks must strive to play a role as “good corporate citizens” who contribute to social development.

(2) Collaboration with NPOs, NGOs, Local Communities, Etc.

In implementing activities that contribute to society, given that collaboration with partners such as NPOs/NGOs, volunteer organizations in the local community, governments, and the public sector is effective, banks must strive to co-operate with partners required for the solution in accordance to each issue.

(3) Supporting Voluntary Social Engagement by Bank Employees

Encouraging bank employees to be socially engaged by contributing to the local community or environmental preservation efforts through volunteer activities helps to ensure the fairness and transparency of banks. While respecting individual initiative, banks must strive to establish an environment that facilitates social engagement of bank employees through the introduction of support programs and the like.

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(Severing Anti-Social Forces) 8. Banks shall resolutely confront anti-social forces, which threaten the safety and order of civil society, and thoroughly sever relations with them.

(1) Rejecting Anti-Social Forces

Eliminating anti-social forces, a disease that threatens the order and safety of civic society from banking transactions and the like is an extremely important matter in terms of maintaining the trust that banks have built up over many years and contributing to the development of a healthier economy and society, as well as preventing damage to not just banks and their executives and bank employees but also customers.
As a result, it is important for top-level managers to always take a firm stance against anti-social forces, demonstrate a zero-tolerance policy that rejects any relations whatsoever with such anti-social forces, including not just transactions at banks themselves but also transactions such as provision of financial services through collaboration with other companies (sales finance companies, etc.), and take action based on such a policy.

(2) Developing an Integrated Management System to Prevent Damage

In the event that inappropriate demands are made by anti-social forces, it is necessary for banks to establish an integrated management system in order to prevent damage by these forces and operate this system on an ongoing basis.
Should an inappropriate demand be made by anti-social forces in some form, it is important for the situation to be properly understood and calmly addressed based on a system involving smooth collaboration and co-operation between related departments, including legal and other specialized personnel.
Moreover, banks are required to prepare manuals and so forth summarizing management principles, countermeasures, etc., that contribute to preventing relations with anti-social forces and to improve in-house education and training.

(3) Enhancing External Collaboration

In addition to the bank’s head office, it is necessary for branches to designate personnel responsible for reporting to and consulting with the relevant authorities and to continue collaborating closely with law enforcement officials to maintain communication under normal circumstances. On the industry and regional level as well, it is important to make active efforts to implement various measures aimed at preventing relations with anti-social forces.

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