Revisions to the Dutch General Banking Conditions (GBC) have been made following a consultation process between the Dutch Association of Banks (Nederlandse Vereniging van Banken) and several consumer and business organisations. These revisions entered into force on the 1 March 2017 and replace the GBC of 2009. The GBC apply to all products and services and the entire relationship between the bank and (consumer/business) client, including loan documentation, unless the borrower is in a strong position. As such, you may find that the GBC is applicable in banking transactions where a Dutch bank is involved. The revised GBC contain a number of important amendments which you may find interesting: -
1. The scope of a bank's Duty of Care has been extended to cover all products and services provided by banks in an attempt to ensure that comprehensive information is provided about products and services. The duty of care already existed in law and jurisprudence. However, this extension in scope also covers prejudice to financial markets, which is not covered by law or jurisprudence.
2. In line with the FATCA treaty, clients must provide banks with all information to determine the Country of Residence for tax purposes.
3. The Rates and Fees which banks may charge for their products and services are explained in more detail. If no rate or fee has been agreed between the bank and its client, the maximum rate that may be charged will be that which would be charged in similar cases. Rates (not fees) may be changed at any time (after informing the client thereof), except if these are fixed rates for a fixed period in time. Such change may occur e.g. due to market circumstances or developments in capital markets.
4. The scope of the (already existing) Right of Pledge included in the GBC is explained in more detail in the revised GBC. If the GBC apply, a right of pledge is created on, amongst others, credit balances with and securities invested through the bank in favour of the bank.
5. The obligation for a client to immediately, upon the bank's request, provide (additional) Collateral (so called a "positive pledge") is explained in more detail. It is not permitted to provide a right of pledge on a company's assets if a right of pledge on inventory is requested. A novelty is that a client could be required to agree to a security surplus arrangement (overwaarde-arrangement). The bank may acquire any surplus in proceeds realised from the enforcement of security rights created in favour of another creditor under such security surplus arrangement.