Rules governing the payment of sales commissions and incentives by banks are expected to be in place by March next year, according the Australian Bankers’ Association (ABA).

The timeline is revealed in the first independent governance report on ABA customer protection initiatives, written by former auditor-general Ian McPhee.

A separate independent review of sales commissions is under way, led by former Australian Public Service commissioner Stephen Sedgwick. This panel is reviewing the outcomes of removing or modifying sales commissions.

“The findings of this review will assist each bank to have overarching principles on remuneration and incentives to support good customer outcomes and sound… practices,” Mr McPhee says in his report.

“However, changes and communication of the changes may require additional time due to the potential impact on agreements and contracts and other practical considerations.”

ABA members would have until the end of next year to implement changes following a period of consultation.

Mr McPhee says the ABA will consider seeking regulatory approval for any remuneration policies implemented, “to enable a more open approach between banks in remuneration policies”.

To stop staff who are removed over poor conduct from re-entering the industry, the ABA has proposed a register of offenders. It has formed a working group on the proposal.

Mr McPhee says the proposed register would cover staff who deal directly with customers and back-office personnel.

“A proposal is being developed to give consideration to the various legal and operational issues. The register raises a number of complex legal matters that will need to be clarified and resolved.”

The timetable for the register aims for principles to be agreed by June next year, with implementation that December.

The governance report also examines how banks handle complaints, whistleblowers, the Code of Banking Practice and supporting the Australian Securities and Investments Commission.

ABA CEO Steven Munchenberg says the industry is working to address concerns on customer relations.

“We are pleased Mr McPhee has noted the genuine commitment by the industry to address issues and our recognition that strong industry leadership is needed for us to meet our objectives,” Mr Munchenberg said. “Banks will work hard to accelerate the implementation of the initiatives.”