Revised General Banking Conditions: standard terms and conditions for Dutch banks
With the General Banking Conditions 2017, the relationship between banks in the Netherlands and their customers has entered a new dimension. The new conditions are more consumer-friendly and there is more emphasis on a bank’s duty of care.
As of 1 March 2017, all banks in the Netherlands use new standard terms and conditions in their relations with customers: the General Banking Conditions 2017 (Algemene Bankvoorwaarden 2017, the “GBC 2017”). The GBC 2017 address the customer directly, use plain language and simple words, and contain many examples of actual situations. The GBC 2017 reflect the stringent duty of care that banks are required to take into account when dealing with customers and are more consumer-friendly than the previous GBC.
All banks in the Netherlands use the same standard terms and conditions to document the overall relationship between the bank and its customer: the GBC (previously the GBC 2009). The GBC are general in the sense that all transactions between a bank and its customers are subject to the GBC. Moreover, they are applicable to consumer clients and business clients alike and they are used by all banks that are a member of the Netherlands Association of Banks (Nederlandse Vereniging van Banken, NVB), which are effectively all banks and all branches of foreign banks established in the Netherlands. Thus the GBC form the very foundation of the relationship between a bank and its customers.
Since 2009 there have been social, technical and legal developments that have made a revision necessary. Reference is made in this connection to the global financial crisis, internet banking, European legislation such as MiFID and the PSD2, and case law on the mis-selling of financial products. The GBC 2017 were drawn up in close consultation with consumer organisations and business sector organisations representing both large corporates and SMEs. Consequently, although a particular provision of the GBC 2017, such as the provision on the right of set-off, could still be challenged in court by an individual consumer or an individual SME on the ground that it is unreasonably onerous, the consumer organisations and the business sector organisations have forfeited this option. Whether the customer is bound by the GBC 2017 is dependent on whether the customer has explicitly or implicitly accepted the GBC 2017. It could also be that the customer has accepted a previous version of the GBC and has thus bound itself to future changes thereto. In practice, banks in the Netherlands are seldom prepared to disapply the GBC or certain provisions thereof.
Compared to the GBC 2009, the GBC 2017 have been simplified as much as possible, to ensure that a customer who lacks higher education is able to understand them. Furthermore, Article 1 of the GBC 2017 explicitly provides that a provision in the conditions for a specific product that is contrary to the GBC prevails over the GBC, but that that provision can never adversely affect the rights and protection granted to consumers under the GBC. Article 2 states that the bank has a duty of care towards the customer and shall take into account the customer’s interests to the best of its abilities. What is likewise new is that Article 2 also imposes a duty of care upon the customer. The customer must exercise due care towards the bank and take the bank’s interests into account to the best of its abilities. The customer may only use the services or products of the bank for their intended purpose and may not misuse them or cause them to be misused. Pursuant to Article 3 the customer is obliged to provide the bank with information about its activities and objectives and how it has acquired the funds, securities or other assets that it has deposited with or through the bank. Pursuant to Article 5, the bank is allowed to engage third parties and outsource activities. However, if it does so in the performance of an agreement with the customer, the bank remains the customer’s point of contact and contracting party. The above does not detract from the fact that the key provisions of the GBC 2009 have remained unchanged as a matter of substance. For example, the provisions dealing with the bank’s records, its right of pledge and set-off, the obligation of the customer to provide adequate security to the bank upon the bank’s request, the governing law, and the court having jurisdiction. These provisions have been redrafted in simpler wording, but their content has remained the same.