Code of Conduct

Established November 22, 2005
(Revision of Code of Ethics established in September 1997)
Partially revised February 14, 2013
Partially revised November 14, 2013
Partially revised March 15, 2018
Partially revised September 15, 2022

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 complying with the letter and spirit of relevant laws and regulations, international rules and the underlying spirit, as well as doing their duties toward realization of a sustainable society, while respecting the human rights of all persons 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 through their customer-orientd business conducts.
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.

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.

(5) Duties toward Realization of a Sustainable Society

As initiatives for achieving the Sustainable Development Goals (SDGs) (Note) are taken both in and outside Japan, it is essential for banks to endeavor to address such social challenges as environmental issues and human rights issues as well as to establish governance structures under which they work on these issues.

(Note) Sustainable Development Goals (SDGs)
SDGs consist of the 17 goals and 169 targets set forth as an action plan for people,  planet and prosperity in the resolution, “Transforming our world: the 2030 Agenda for Sustainable Development,” which was adopted by the United Nations Sustainable Development Summit held in 2015. Each country is required to take action to achieve these goals by 2030. The goals seek to address such social issues as poverty and hunger, and to solve problems related to the environment, gender equality, energy and labor environment, etc.

2. Banks shall contribute to the development of the economy and society both domestically and internationally, by striving to provide stable functions as an infrastructure to support economic activities and to continuously employ creativity and originality toward upgrading financial services 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 events of disasters in preparation for terrorism, cyberattacks, natural disasters and other events that threaten civic life and corporate activities, while addressing customers’ needs through doing customer-oriented business conducts.

(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 even further improve these functions as an essential factor to support the realization of a sustainable society.
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 natural disasters, accidents, terrorism and cyberattacks, 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 industry field, 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.
Financial technologies also 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.
In addition, companies are now required to act with consideration given to ESG awareness (Note). Shareholders and investors have generated a concept of “ESG investment,” in which they conduct investment analysis and make investment decisions based on the assessment of how companies work on social and environmental issues, and have established a governance structure. It is becoming mainstream concept among investors to think that giving considerations to the ESG factors is rational and suits the needs of society and the benefits of trustors. In this regard, there are expectations for banks and other financial institutions to provide financial support, in terms of funding and other aspects, to help realize a sustainable society and solve social issues.
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 should help realize a sustainable society and solve social issues. As they make such efforts, they are required to give consideration to open innovation, to be achieved through collaboration with concerned parties, and coordination with a variety of stakeholders.
In delivering financial products and services, banks must, through their customer-oriented business conducts, 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.

(Note) ESG (Environment, Social and Governance) awareness:
ESG investment refers to an act to incorporate environmental, social and governance issues into investment analysis and decision-making processes. This approach has increasingly spread among investors around the world, primarily Western investors, prompted by the United Nations announcing in 2006 the Principles for Responsible Investment (PRI), which encourages investors to take investment actions inclusive of the perspectives on ESG issues.

(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 in an easy-to-understand manner 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) Contribution to the creation of an inclusive society 

Banks must strive to contribute to the creation of an inclusive society through the provision of financial services that are accessible to all, by providing facilities that are barrier-free, based on universal design and easily accessible to everyone including disabled and elderly customers and by employing creativity and originality to develop an environment in which products, services and transaction forms are easy to use.

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.

4. Banks shall communicate widely with society by disclosing business and other information actively, effectively and fairly, in an effort to enhance their corporate value and secure the understanding and trust of society through a constructive dialogue with a wide variety of surrounding stakeholders.

(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 that is important and highly reliable 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.

5. Banks shall respect the human rights of all persons.

(1) Responsibility to respect human rights

While protecting human rights is an important responsibility of a nation, corporations are also required to take initiatives to eliminate violation of human rights from a wider perspective.
Banks shall recognize and respect human rights as provided globally, and fulfill corporate responsibilities. Moreover, banks must reflect them to their corporate activities through clearly demonstrating a policy to respect human rights and expressing a commitment both internally and externally, among other measures.

(2) Prevention and corrective measures for infringing on human rights

Recognizing the possibility that their activities affect human rights, banks must develop and continually review mechanisms and procedures to prevent the occurrence of infringing on human rights, and, in the unlikely event of infringing on human rights, promptly work to correct it and prevent its recurrence.

6. Banks shall realize a flexible working environment and a system that promotes the active participation of diverse human resources. Banks shall also preserve a comfortable workplace environment with considerations given to health and safety.

(1) Creating an environment to promote the active participation of diverse human resources

It is important for banks to strive to create an environment in which diverse human resources, regardless of gender, age, nationality, employment type, etc., can demonstrate their abilities and play an important role, based on the recognition that mutual recognition and stimulation of employees with diverse values and backgrounds leads to the creation of new values.
To this end, it is necessary for banks to 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, and to establish and appropriately operate a personnel and treatment system that fully takes into account the nature of work, results, contributions to the organization and expectations for future roles of employees, while promoting the diversity in employment and work patterns.
Moreover, banks must strive 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), and to realize flexible working styles that enable diverse employment.

(2) Ensuring a healthy and safe working environment

In order to ensure a comfortable workplace environment with considerations given to health and safety. banks must strive to engage in discussions and consultation with bank employees directly or with their representatives in an honest manner. Moreover, banks must respect personalities and privacy of bank employees, and take measures to prevent improper treatment or discrimination in the work place, such as sexual harassment or power harassment.

(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.

7. Banks shall actively engage in human resource development and skill development to help employees build their own careers. Banks shall also contribute to the improvement of financial literacy in society by participating in financial and economic education.

(1) Promoting employee human resource development

Banks need to recognize human resources as a source of sustainable corporate value enhancement and economic growth, and to undertake initiatives and provide opportunities that contribute to skill development and upskilling for employees in order to promote value creation and strategic realization for banks, as well as self-directed career development for employees.

(2) Contribution to financial and economic education

Banks must strive to promote the understanding of financial knowledge throughout society and contribute to the wealth of the people and the development of the Japanese economy. To this end, banks must strive to fulfill their social mission beyond the provision of financial services through participation in financial and economic education ranging from schooling to adult education.

8. Banks shall take the initiative to build a sustainable environment and society that is highly resilient to changes in the global environment and social conditions.

(1) Contribution as financial and social infrastructure

Banks are required to play their expected roles as a financial and social infrastructure, and to financially support the creation of a sustainable environment and society, including our country's transition to carbon neutrality.

(2) Collaboration with diverse stakeholders

Banks need to manage climate change and environmental risks, including those of the companies they invest in and finance, and to meet the expectations of their stakeholders while maintaining their own soundness. By engaging in dialogues with a diverse range of domestic and international stakeholders, it is necessary to deepen understanding of initiatives and issues aimed at building a sustainable environment and society, and to engage in collaborative efforts.

9. Banks shall proactively engage themselves in society and contribute to its development as a good corporate citizen, being fully aware that they can exist and develop only with 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 by providing bank employees with the opportunities for social engagement and adopting support programs to facilitate their social engagement and the like.

10. Banks shall resolutely confront anti-social forces, which threaten the safety and order of civil society, and thoroughly sever relations with them. Moreover, as international society is faced with terrorism and other threats, banks shall endeavor to reinforce their countermeasures against money laundering and measures to combat the financing of terrorism.

(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.

(4) Responding to Terrorism and Other Threats

It has become an important obligation for banks to endeavor to unceasingly enhance their countermeasures against money laundering and measures to combat the financing of terrorism. Accordingly, banks must make these endeavors while frequently exchanging information and securing close coordination with relevant administrative agencies and foreign authorities, etc.